Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

Skillcentres and Jobcentres

Mr. Strang: asked the Secretary of State for Scotland what discussions he has had with the Manpower Services Commission in Scotland about its plans to close skillcentres and cut staff at jobcentres; and if he will make a statement.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): I attended the meeting of the Manpower Services Committee for Scotland on 10 September at which the development of the employment service was among the matters discussed and joined my right hon. Friend the Secretary of State for Employment and other ministerial colleagues in meeting members of the Manpower Services Commission in London on 6 December on this subject. My right hon. Friend the Secretary of State for Employment announced the Government's acceptance of the commission's final recommendations on 9 January in his reply to my hon. Friend the Member for Darlington (Mr. Fallon). The commission has not yet completed its consideration of the Skillcentre Training Agency's latest business plan.

Mr. Strang: Is it not outrageous that, when hundreds of thousands of Scots are unemployed through no fault of their own and the Government should be providing more training and help, they are planning to close two skillcentres and three skillcentre annexes and to cut 70 jobcentre staff whose job it is to help the unemployed find work?

Mr. Stewart: No, not at all. We are expanding the number of jobcentres in Scotland by a total of seven, including two in Edinburgh, in Corstorphine and Lady road. I emphasise that by tailoring provision to employment need, the Manpower Services Commission will assist more people. The figure this year of 9,600 will be increased to 17,000 in 1985–86.

Mr. Millan: Will the Minister ensure that no decision is taken by the MSC or Ministers to close skillcentres before the Select Committee on Employment reports and before there is a debate in the House? Will he also ensure that the MSC does not pre-empt any decision, as it has for example in Govan, by running down courses and selling off machinery at knock-down prices? Does the Minister agree that what is happening there and elsewhere is a scandal?

Mr. Stewart: As the right hon. Gentleman knows, debates in the House are not for me to decide. Unquestionably, there is over-capacity in the provision of the skillcentre network in the west of Scotland. I am, of course, aware of the Select Committee's investigation.

Mr. Bill Walker: When considering the future of skillcentres, will my hon. Friend take into account whether jobs are available in the skills for which training is given? Surely it is nonsense to train people in skills for which jobs are not available. Will my hon. Friend also take into account the facilities and spare capacity in private companies and Government-owned bodies which could be used to train people? Is the MSC directing its attention to that aspect?

Mr. Stewart: Yes, my hon. Friend is right. It is sensible for skillcentre courses to reflect what industry wants. That is my hon. Friend's point. My hon. Friend is also right to say that the MSC believes that there should be a variety of providers of relevant, cost-effective courses.

Mr. Craigen: Will Scotland's industry Minister tell us how, with almost 350,000 unemployed, he can meekly sit back and allow skillcentres to close, especially when the Scottish CBI says that there are shortages in skilled labour? Moreover, does the Minister think it satisfactory that the jobless in Scotland should be left to rely mostly on self-selection procedures? Is that not really the nature of the new schemes resulting from the cut in jobcentre staff?

Mr. Stewart: No, not at all. As I have already explained, there will be more jobcentres and the level of service will be maintained by travelling staff, the streamlining of procedures and modern technology.
I should have thought that the Opposition would accept the general proposition that it is absurd to waste resources at skillcentres. There is a capacity for 1,980 places, of which 1,234 are in use. If the proposals are implemented, there will be 1,360 places. We must use resources effectively.
As I said to the hon. Member for Edinburgh, East (Mr. Strang), the result of the proposals will be an increase in the number of people in Scotland being assisted with training.

Teachers (Pay)

Mr. Douglas: asked the Secretary of State for Scotland if he will make a statement on the progress of discussions in relation to teachers' pay in Scotland.

Mr. Donald Stewart: asked the Secretary of State for Scotland if he will make a further statement on teachers' pay.

Mr. Wilson: asked the Secretary of State for Scotland if he will make a further statement on teachers' pay.

The Secretary of State for Scotland (Mr. George Younger): I wrote again on 8 January to the teachers' side of the Scottish joint negotiating committee for teaching staff in school education inviting it to give further thought to my earlier proposal that the SJNC should undertake a detailed examination of salaries and conditions of service together. I understand that the SJNC decided yesterday to


make a joint approach to me for a meeting. Although I have not yet received this letter, I shall, of course, be glad to meet its representatives.

Mr. Douglas: Does the Secretary of State agree that the mantle with which he seeks to cloak himself — that of generous George — is wholly misplaced? Is it not true that under the Conservative Administration teachers' pay in Scotland has fallen far below the level that they would expect? Is it not a farce to suggest that the Government have no responsibility for ensuring that teachers' pay keeps up with rather than falls behind the level of inflation? Is he aware that he has managed to unite all the teaching forces in Scotland against his Government?

Mr. Younger: I do not accept the hon. Gentleman's calculation and figures. However, I fully appreciate that teachers feel very strongly about what they perceive to be injustices, and about which they are currently complaining. By far the most reasonable way to deal with the problem is to ask the body set up for the precise purpose of considering pay and conditions of teachers to investigate the complaints.

Mr. Donald Stewart: Why is the Secretary of State surprised by the action of the Scottish teachers after 10 years' erosion of their salary levels and what they have found to be the futility of dealing with Scottish Office Ministers? Is he aware that, far from playing the role of generous George, he is playing the role of General Jaruzelski in making the teachers dance to the tune of another country? The surprising factor is the forbearance of the teaching profession in Scotland.

Mr. Younger: I cannot agree with the right hon. Gentleman. When comparing teachers' salaries since 1979 with other grades—something that they purport to do—they have had similar rates of increase to other local authority employees and civil servants. Therefore, the right hon. Gentleman does not have a strong point.
As I keep saying, I have not turned down their complaints out of hand. I have suggested a way forward, and I hope that, rather than disrupt our schools, the teachers will accept my suggestion.

Mr. Wilson: The Secretary of State says that he has not turned down the teachers' claim out of hand. In his letter of 11 December he said that he would consider the proposals
on their merits and in the framework of the Government's existing public expenditure plans"?
Is not the reason why he cannot go ahead with an independent pay review that he has orders from the Treasury not to impede the Government's giveaway of taxation money orginally planned for Easter?

Mr. Younger: I suppose that the teachers' employers are in exactly the same position as every other employer throughtout the country. If they are considering what they can give in wage increases to their employees, they must consider the resources that they have available. I do not see anything unusual about that.

Mr. Henderson: Is my right hon. Friend aware that some teachers have made comparisons between increases in their pay and the pay of Members of Parliament? I have obtained from the Library the comparative figures for the 10 years from 1974. They show that, compared with the increase in the retail prices index, teachers's salaries have risen by 7 per cent. while the salaries of Members of

Parliament have declined by 20 per cent. Does my right hon. Friend agree that a more realistic comparison would be with teachers' pay south of the border? Does he recognise that the responsible settlement made last year by Scottish teachers should be fully taken into account, especially as the militancy in England achieved a slightly larger settlement? Should we not reward those who take a responsible attitude, rather than the militants?

Mr. Younger: I am interested in my hon. Friend's comparisons, to which I shall not add, except to say that it might be interesting to discover the reaction of teachers to trying hon. Members' hours of work.

Mr. Maxton: Does the Secretary of State remember that on television just before Christmas he said that to give an independent inquiry into teachers's pay would be to give a blank cheque to the Educational Institute of Scotland? Was that not an admission that the teachers' case is recognised fully by him and that is why he will not have such an inquiry?

Mr. Younger: Not at all. A blank cheque can have any figure, high or low, put on it.

Lord James Douglas-Hamilton: Is my right hon. Friend aware that there is concern about whether re-sits in 0-grade mathematics and English will take place in future? Will this point be borne in mind in any discussions?

Mr. Younger: I appreciate the point that my hon. Friend makes. It is an important matter, which is under consideration, and I hope to announce a decision shortly.

Mr. Dewar: It is no good Ministers deploring the damage that may come from industrial action when the right hon. Gentleman's obstinacy lies at the root of the problem. Leaving aside the curious comparison with so unrepresentative a grouping as Members of this House, does the right hon. Gentleman agree that his refusal to accept an independent pay review is, in a sense, a tacit acceptance that teachers' salaries have fallen behind comparable groupings and do not measure up to the responsibilities of the job?
If the right hon. Gentleman is right in saying, as he consistently maintains, that teachers have done reasonably well out of recent pay negotiations, why is he frightened to set up an independent pay review, thus risking plunging us into a great deal of disruption and difficulty for pupils? Will he reconsider his proposition that any uprating in salary can be bought by the teachers' profession only at the expense of their terms and conditions of employment?

Mr. Younger: I am glad to hear the hon. Gentleman say critical things today about the damaging of the service, because that seems to be an absolutely deplorable development — [Interruption.] I hope that, as we all have the interests of schoolchildren in mind, now that I have agreed to have the meeting which the Scottish joint negotiating committee has requested, I can take it that disruption of schools will stop, at least until after that meeting has taken place.
The hon. Gentleman's supplementary question gives me an opportunity to make it clear, yet again, that, although I might have done so, I have not turned down the teachers' case out of hand. The impression has been given that I have, but I have not. I have disagreed with the method by which they asked for their case to be considered, but I have pointed to a way forward by which


all these matters, including conditions of service, can be looked into. Rather than bust up the education of our children. we should take that way forward and try to get this matter discussed.

Coal Supplies

Mr. Foulkes: asked the Secretary of State for Scotland what steps he has taken since the begining of the mining dispute to ensure adequate supplies of coal for schools and hospitals in Ayrshire.

Mr. Allan Stewart: Throughout the strike the National Coal Board and the coal trade have worked in close cooperation with Strathclyde regional council and Ayrshire and Arran health board to provide adequate supplies of coal for schools and hospitals in Ayrshire. Towards the end of last year action by pickets interrupted the movement of coal in Ayrshire and this irresponsible action led to some school closures. At no time were Ayrshire hospitals affected.
Arrangements have been concluded between the National Coal Board and Strathclyde regional council to rebuild stocks and maintain deliveries, and I understand that coal supplies are now returning to normal.

Mr. Foulkes: I am grateful to the Minister for that answer. Is he aware that, because I telephoned Mr. MacGregor, chairman of the NCB, on this issue, I was telephoned early in the morning by the Scottish director of the NCB to complain at my having had the audacity to phone the chairman? Quite apart from any question of privilege — there may well be one — do not serious doubts arise about the management structure when the director of the Coal Board in Scotland can say to me that he does not accept instructions from his chairman? Does that not underline our call that there is a need for an inquiry into the way in which Wheeler is running the Coal Board in Scotland, which is like that of a tinpot dictator?

Mr. Stewart: The hon. Gentleman was floundering to a remarkable extent, even for him. It was surprising to hear some of his comments in the light of his advocacy on devolution in other contexts. I was not privy to any of the telephone calls to which he has referred, but I am sure that many people will have read press reports about the hon. Gentleman's praise for the chairman of the NCB.

Mrs. McCurley: Does my hon. Friend agree that the best way to ensure adequate supplies for Ayrshire schools and hospitals is to exhort Scottish miners to return to work and end this futile strike?

Mr. Stewart: I agree entirely with my hon. Friend. I can tell her that 850 more Scottish miners have done precisely that since the recent holidays.

Mr. McKelvey: Is the Minister aware that the coal was prevented from being moved to the hospitals and schools by the pickets because the administrator of the Coal Board in Scotland, Mr. Wheeler, instructed the coal to be moved by scab lorry drivers, which was unnecessary and provocative? It was only when the local and agreed lorry drivers were allowed to move the coal that things returned to normal. Throughout the whole of the disagreement and strike, the miners, by agreement, have allowed coal to go to Ayrshire hospitals and schools.

Mr. Stewart: It is hypocrisy to criticise the NCB and its workers for wanting to do their normal jobs and to excuse pickets who seek to prevent that from taking place.

Teachers (Pay)

Mr. Home Robertson: asked the Secretary of State for Scotland what representations he has received about his decision not to set up an independent review of teachers' pay.

Mr. Norman Hogg: asked the Secretary of State for Scotland how many representations he has received on teachers' pay since his decision not to set up an independent inquiry into teachers' pay and conditions.

Mr. Allan Stewart: Since my right hon. Friend responded on 11 December to the request by the teachers' side of the Scottish joint negotiating committee for an independent pay review, he has received some 450 representations.

Mr. Home Robertson: Will the Minister confirm that he has received a set of eminently reasonable representations from my constituent, Mr. John Pollock? Is he aware that I have received a substantial number of representations from parents and teachers in every part of my constituency and that every one of them has supported the EIS claim for a fair and independent review of teachers' pay and conditions?

Mr. Stewart: I am interested to learn that Mr. Pollock is a constituent of the hon. Gentleman, but I do not think that that is a matter on which I should comment either way. In replying to the representations that my right hon. Friend has received, he has said that the SJNC could undertake a detailed review of pay and conditions of service. It has been established for about three years and its remit would include such a review, which has not yet been undertaken. That is a reasonable position for the Government to take.

Mr. Hogg: As the Minister's reply confirms that there is no public support for the decision that his right hon. Friend the Secretary of State has taken — there is no support among the profession or by parents for his own much-vaunted initiative in this matter — does he agree that he has no case and that he should give instructions for an independent inquiry to take place without further delay, and thereby end any prospect of disrupton in the schools?

Mr. Stewart: Teachers' pay has increased broadly in line with that of other local authority employees. During the four years from 1979 teachers' pay increased by 74 per cent. while social workers' pay increased by 63 per cent. I am surprised at the hon. Gentleman's statement. His former colleagues in NALGO would be surprised to hear him argue that teachers merit special and unique treatment not available to other local authority employees.

Sir Hector Monro: Does my hon. Friend accept that it is important for this issue to be resolved as soon as possible? Will he confirm that the joint negotiating committee will be able to consider all the issues relating to teachers' pay and conditions of service? We hope that that body will report quickly to my right hon. Friend the Secretary of State, who can then reach a conclusion.

Mr. Stewart: I confirm that the SJNC's remit covers pay and conditions of service. As my right hon. Friend the Secretary of State told the House in answer to an earlier question, he is prepared to meet the SJNC in the near future to discuss this matter.

Mr. Johnston: Is the Minister aware that it is still difficult to understand why the Secretary of State has


refused to set up an independent pay review? Obviously, such a review would not be mandatory. Clearly, an objective analysis would allow a fair solution to be found more easily. Such an analysis would avoid the inflaming of feeling—suoh as we have seen already—the bust up that the Secretary of State has just criticised, and gratuitous damage to our children's education.

Mr. Stewart: It would not be right to pass the job of making recommendations to an ad hoc group which had no responsibility for implementing them. Established machinery can undertake such a review, and I believe that that is a perfectly sensible proposition.

Mr. O'Neill: Does the hon. Gentleman appreciate that, apart from the purely financial aspects of a strike, the Minister's intransigence is jeopardising the valuable work that has been done in developing the standard grade? That work has been done without extra salaries being paid to the teachers involved. The teachers are now saying that enough is enough and they want to be paid for the work they have done. They feel that they, as opposed to the other professions in Scotland, are entitled to be rewarded for that work.

Mr. Stewart: My right hon. Friend has made provision for the extra work load carried in developing the standard grade. Last week we announced further extra assistance for the teachers involved in phase one. I deplore the disruption that has occurred during the introduction of the standard grade. It is ironic that the EIS asked the Government to speed up the implementation of the standard grade, and that the teachers are now disrupting reforms which are widely agreed to be desirable in the interests of Scottish people.

Mr. Malone: Is my hon. Friend aware that it is desirable that pay and conditions should be linked in any negotiations? Is it not therefore disgraceful that the EIS has rejected out of hand an offer to discuss conditions? Will my hon. Friend clear up a misconception felt by many of my constituents—a misconception that appears to be shared by the hon. Member for East Lothian (Mr. Home Robertson)—namely that the EIS wants an independent review of pay and conditions? The EIS is interested only in pay.

Mr. Stewart: My hon. Friend is right to say that EIS has asked for an independent review solely of pay. That request constrasts with the early-day motion tabled by some Opposition Members which relates to pay and conditions of service. I believe that it is perfectly reasonable to link pay and conditions of service and to conduct a detailed review of both within the existing collective bargaining machinery.

Mr. Ewing: Is it not a fact that the Under-Secretary of State wants to review pay and conditions in the context of the Government's pay policy — in other words, to get the best out of teachers' conditions and to give the worst return to teachers in the form of salaries? Is the hon. Gentleman aware that the blame for the disruption in Scottish education lies firmly at his door and the door of the Secretary of State? In view of that, will the Minister confirm that when the Secretary of State goes to the SJNC meeting he will go to negotiate and not, yet again, to dictate?

Mr. Stewart: My right hon. Friend will, of course, listen carefully, as he always does, to the points that the SJNC put to him. Disruption in Scottish schools lies firmly at the door—

Mr. Robert Hughes: Of the hon. Gentleman.

Mr. Stewart: —of those who are causing the disruption. I hope that Scottish teachers will realise that that disruption does not just cause damage to the education of Scottish pupils, but it cannot possibly do the teachers case any good.

Glengarnock Steelworks

Mr. Lambie: asked the Secretary of State for Scotland if he will meet the chairman of British Steel to discuss the recent announcement on the future of Glengarnock steelworks.

Mr. Younger: I met the chairman of the British Steel Corporation on 29 November, when we had a wideranging discussion of the corporation's activities in Scotland. I have no plans for a further meeting in the near future.

Mr. Lambie: I appeal to the Secretary of State to meet the chairman of the British Steel Corporation again to discuss the case for retention. It will be supported at a meeting tomorrow with his hon. Friend the Under- Secretary of State, the Member for Eastwood (Mr. Stewart), by the steel workers' acting committee and councillors from Strathclyde and the regional council. It will show that Glengarnock steelworks can be viable, competitive and profitable if given a chance.

Mr. Younger: As the hon. Gentleman will be aware, I am worried about this matter. I am glad that my hon. Friend is meeting those representatives tomorrow. I know that he is looking forward to hearing the case that they put forward.

Mr. Corrie: If my right hon. Friend meets the chairman of the British Steel Corporation again, will he point out that it will cost more to close the works than to keep them open? Is my right hon. Friend further aware that with its new proposals the work force is pricing itself into jobs by cutting costs in line with Government policy, to its own detriment? If the British Steel Corporation is determined to close these works and get rid of Glengarnock, will he suggest that they should be kept open to give a private buyer a chance to see whether the firstclass work force can keep its jobs?

Mr. Younger: I am grateful to my hon. Friend for keeping me so closely informed of his constituents' anxiety about this matter. The decision to close, which I greatly regret, is one entirely to be made as an operational matter by the British Steel Corporation. There is no doubt about the commitment of the work force. I am sure that the facts and figures that it will produce will be listened to with the greatest of interest by my hon. Friend and the British Steel Corporation.

Mr. Dewar: May I take up strongly with the right hon. Gentleman the point that he made about it being an operational decision for the British Steel Corporation? If that is the Government's final view, I fear that the works may have a short future, because the British Steel Corporation seems determined, despite the far-reaching


and imaginative proposals which will eliminate the current deficit in the plant, to continue with its closure plans. Will the Secretary of State try to persuade his colleagues and himself, sadly, in view of what he has just said, that the Government cannot shelter behind the concept that it is a bold management decision by the British Steel Corporation, given the impact that the loss of a further 200 key jobs will have on an area of high unemployment? I hope that he will reconsider the matter, because if he does not the outlook is black.

Mr. Younger: I sympathise with the whole position, of course. I do not accept, and nor would his own Government, the hon. Gentleman's point that this is anything other than an operational decision for the British Steel Corporation. That has always been the way that such matters have worked. We cannot appoint people to manage an industry and then second-guess them on everything that they do. For that reason the representations should be made to the British Steel Corporation, and I know that that is where they will be made.

Dornoch Firth and A9

Mr. Maclennan: asked the Secretary of State for Scotland if he will seek to accelerate the construction of the Dornoch Firth crossing and the improvement of the A9 through Caithness and Sutherland.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): My Department is already proceeding as quickly as possible with preparations for the Dornoch Firth crossing and other improvements on the A9 through Caithness and Sutherland. Progress will depend upon the resolution of objections to published proposals and on the extent to which funds can be made available within the Scottish trunk road programme.

Mr. Maclennan: Is the Minister aware that today the unemployment levels in Sutherland are higher than anywhere in Scotland? Is he also aware that the A9 road north of Tain is a woefully inadequate arterial road which needs capital expenditure urgently, that almost no spending is planned for it in the next financial year? Does he realise that by starting the Dornoch Firth building works he could cut unemployment in Sutherland and Caithness by 10 per cent. and give a filip to the long-term future of the local economy?

Mr. Ancram: I do not know where the hon. Gentleman got his information about no projected spending on the A9. In the years 1985 to 1989 there are seven improvements planned for the A9 north of Dornoch, at a cost of about £11 million, and six improvements planned for the road south of Dornoch, also at a cost of £11 million. Obviously, the bridges will be of benefit, not only to travellers on the A9 but to local people. I hope that the hon. Gentleman accepts that it is a large and costly scheme requiring extensive design work, and that it will make a very big claim on the resources available.

Mr. Michael Forsyth: Does my hon. Friend, in considering improvements to the A9, ensure that priority resources are given to the Dunblane bypass? Will he be in a position shortly to announce the line of route?

Mr. Ancram: I congratulate my hon. Friend on using the opportunity to press, as he does so assiduously, the

interests of his own constituency with regard to that bypass. As he appreciates, we have said that that bypass will be built in due course. Obviously, we are not yet in a position to announce the line.

Mr. Ewing: Does the Minister agree that the interest of the hon. Member for Stirling (Mr. Forsyth) in improving the bypass from Dunblane is to allow him to make a quick getaway?

Mr. Ancram: I think that my hon. Friend's concern is to see communications improved right across Scotland. I know that that has never been of particular interest to the hon. Member for Falkirk, East (Mr. Ewing).

Airports (Privatisation)

Mr. Bruce: asked the Secretary of State for Scotland if he will make a statement on the implications for Scotland of the privatisation of Scottish airports.

Mr. Ancram: The Government's aim is to ensure adequate airport capacity, provided as efficiently and costeffectively as possible, to meet Scotland' s needs. Particular proposals for privatisation will be pursued with this objective in mind.

Mr. Bruce: Will the Minister acknowledge that the management of the four main airports in Scotland by the British Airports Authority has been of considerable benefit, and that the retention of that management group and the link with the BAA will continue to be of benefit to Scottish people? Is the Minister aware that, in the particular case of Aberdeen airport, Grampian regional council — which, as the Minister knows, is Conservative-controlled—has expressed doubts as to the case for privatisation?

Mr. Ancram: The hon. Member must be aware that no decisions have yet been taken concerning privatisation of the BAA airports in Scotland, and at this time it would be improper for me to speculate on how that might happen.

Mr. Robert Hughes: Is the Minister aware that there is no case whatever for privatising the airports'. Will he further accept that the majority opinion is that the four major airports in Scotland should not be sold off as an entity but as a group which contains Heathrow, otherwise business will be very seriously disrupted?

Mr. Ancram: The hon. Member is obviously trying to get me to speculate in a way that I have just said I will not do. I remind him that privatisation often creates greater efficiency and savings for those who use the services.

Lord James Douglas-Hamilton: Will my hon. Friend bear in mind that the Sottish airports run by the CAA in the Highlands and Islands and by my constituents in the CAA headquarters in Edinburgh, West and elsewhere in Scotland are run very economically, bearing in mind the essential lifeline service that they provide, and that it is extremely unlikely that any other body could run them as economically in the circumstances?

Mr. Ancram: My hon. Friend is also pre-empting decisions that have yet to be taken. Obviously, we shall be testing, and are indeed testing, the market for the proposition at the moment.

Mr. Wallace: The Minister will be well aware that in a written answer given to me by the Department of


Transport earlier this week it was indicated that the Scottish Office, along with others, was considering proposals for six airports in the Highlands and Islands. Is there a distinction between the proposals and firm offers for sale, which were due in by 31 December last? If so, what is that distinction?

Mr. Ancram: A number of offers and inquiries have been received and are being considered. Obviously, those offers and inquiries differ one from the other.

British Leyland, Bathgate

Mr. Dalyell: asked the Secretary of State for Scotland if he will make a statement on his latest discussions on the future of British Leyland, Bathgate.

Mr. Allan Stewart: As the hon. Member will be aware from the answer that I gave him last month, my right hon. Friend and I are doing everything that we can to find a successor enterprise for the British Leyland plant at Bathgate, and to create new job opportunities for the West Lothian area.

Mr. Dalyell: Is Mr. Charles Nickerson getting every encouragement from the Scottish Office?

Mr. Stewart: I can confirm that my officials keep in regular touch with both of the companies that have been mentioned, and have been in contact within the past few days.

Mr. Robin Cook: When the Minister examines what he can do for job opportunities in West Lothian, will he bear in mind the fact that in 1980 West Lothian received £7 million in housing and rate support grants, and in 1986 it will receive the grand total of £700,000 from both sources? Does the hon. Gentleman not realise that that sharp drop in outside support will gravely hinder the district council in responding to the tragedy of Bathgate and mean fewer jobs in West Lothian?

Mr. Stewart: I am a firm supporter of the Government's housing policies. I thought that the hon. Member for Livingston (Mr. Cook) would mention one of the most important factors in the West Lothian situation, which has been the outstanding success of the new town in attracting a wide range of new companies and providing job opportunities for people not just in Livingston but from elsewhere in West Lothian.

Mr. Tom Clarke: Does the Minister agree that it is absurd that there should be any doubt about the future of the plant, in view of the demand for those vehicles in Third world countries? Does he accept that there is an urgent need for a meeting between his right hon. Friend the Secretary of State for Scotland and the Minister for Overseas Development so that a conclusion can be reached that would be helpful to the workers of Bathgate as well as those who are starving in developing countries?

Mr. Stewart: The point is that the overseas demand for Leyland's products has declined sharply in recent years. It is true that there has been a marginal improvement in demand recently, but British Leyland has more than enough capacity at its Leyland plant to accommodate even substantially increased demand for trucks.

Mr. Ewing: Is the Minister aware that the Nickerson proposals have the full support of the shop stewards at the British Leyland Bathgate plant? Will he give the House an

assurance that the matter will be brought to a conclusion as speedily as possible to remove the uncertainty, not only from the British Leyland plant at Bathgate, but from the whole of that local authority area, which is suffering badly as a result?

Mr. Stewart: I can assure the hon. Gentleman that we are as anxious as anybody else to reach a satisfactory conclusion. I can confirm that my Department is in close touch with Mr. Nickerson.

Rural Bus Services

Mr. Kirkwood: asked the Secretary of State for Scotland if he will make a statement on the effect of planned Government legislation on Scottish rural bus services.

Mr. Ancram: Under existing policies many services have been curtailed or withdrawn. Our proposals offer the prospect of better services by removing outdated restrictions and encouraging operators to offer new ways of meeting needs. To overcome any transitional difficulties a rural bus grant will be available to all operators of rural services for a four-year period and an innovation grant scheme will encourage the development of new initiatives.

Mr. Kirkwood: Is the Under-Secretary of State aware that officials in his Department revealed recently that an internal departmental study shows that, whereas there might be savings in subsidies in the Lothians and Strathclyde, in the rural areas of Scotland local authorities will eventually have to pay more in subsidies? I challenge the hon. Gentleman to publish that survey so that we can look at the facts. Can he give the House an assurance that if, eventually, that transpires to be the case and rural regional authorities in Scotland have to pay more in subsidies, he will make sure that the finance is made available rather than allow routes to contract further?

Mr. Ancram: The hon. Gentleman sounds as if he believes that the bus industry and the use of buses in Scotland, particularly in the rural areas, is increasing. Perhaps some of his comments on the matter would stand in a better light if that were so, but we are working against a history of decline in bus usage and in the whole bus industry in Scotland, particularly in the rural areas. I believe that by putting the subsidised routes out to tender efficiency will be increased and a better service will be provided at a better cost.

Mr. Henderson: Is my hon. Friend aware that there has long been anxiety about the quality of rural bus services and that the announcements that he has made will be very welcome to those who live in rural areas? Is he aware that the result of an experiment in deregulation in Herefordshire was to reduce subsidy, to increase services and to reduce fares, which is surely what we want?

Mr. Ancram: I am grateful to my hon. Friend for bringing that example to the notice of the House. If subsidised routes are put out to tender, and if they are efficiently run at present and are as cost-effective as possible, obviously those same operators will continue, but if there is a better and cheaper way of running them, tendering will provide that.

Mr. Steel: Before the Secretary of State comes to any final conclusions on the matter, will he undertake to examine the financing of the two community bus services


that exist in Scotland, one in the constituency of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), and one in my constituency, recognise what a cost-effective and inexpensive way this is of providing a service, and Consider the assistance that he could give with replacement vehicles?

Mr. Ancram: The right hon. Gentleman makes a good point, and it is certainly a point that was part of the White Paper published by the Government, that innovation and new ideas, particularly in rural areas, are important. Indeed, he has examples in his own constituency and in his own area of such ideas providing improved services. It is for that reason, as I have already said, that we shall be introducing an innovation grant scheme to try to encourage further such ideas.

Mr. Bill Walker: Does my hon. Friend agree that in Scotland in particular the rural bus service has been in savage decline for 25 years? Many parts of my constituency are not served by any public transport. Therefore, to continue with the status quo could only mean fewer and fewer services being made available to my Highland constituents. The proposals that the Government are making are therefore an attempt to reverse this declining situation.

Mr. Ancram: I am grateful to my hon. Friend for making that point so strongly. It is precisely because we have been faced with a history of decline in the bus services—and as constituency Members most of us will know from the complaints we receive that people are not satisfied with the bus services they have at present—that we believe that our proposals offer the one opportunity of reversing that trend. It has been noticeable that in all the criticism that has been made of the White Paper not one alternative idea for improving bus services has been put forward.

Mr. Millan: The Minister said that it is his belief that the proposals will lead to an improvement in bus services. However, the fact is that neither the Minister nor his officials have ever run a bus service. It is impossible to find anyone in Scotland who has run a bus service who believes other than that these proposals will be disastrous, not only for rural bus services, but for many other bus services as well.

Mr. Ancram: I am sure that the right hon. Gentleman will remember that almost precisely the same criticisms were made of the express coach services before deregulation. The use of those coaches has proved how wrong that criticism was.

Mr. Craigen: What guarantee will the Minister give to the rural communities that he will save their buses? He keeps telling the House about the money that he has allocated for innovation grants. Why is it that COSLA views as an insult the amount of money that he is making available to Scotland to retain rural bus services?

Mr. Ancram: As the hon. Gentleman knows, I met the transport sub-committee of COSLA on Monday. I made it clear to the sub-committee that throughout the United Kingdom a grant will be paid in the rural areas within the transition period of four years. That will start at a rate of £20 million, reducing on a graduated scale to £5 million in the last of those four years. When the hon. Gentleman talks of saving buses, he speaks as if that is what is happening in the rural areas. The rural areas in particular

have suffered from reducing bus services. These proposals at last give them a chance of seeing the sort of services that they want.

Hepatitis B Virus

Mr. George Robertson: asked the Secretary of State for Scotland what action he is taking to protect police officers, ambulance personnel, doctors and nurses from the risk of catching hepatitis B virus.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan MacKay): Guidance was issued by the Scottish Home and Health Department on 3 December 1984 on precautions to be taken to protect health care personnel from the risk of contracting hepatitis B in the course of their work. We are at present considering whether guidance should be given to the police service on this matter.

Mr. George Robertson: Does not the serious increase in cases of the deadly hepatitis B show that the increasing drug epidemic is spreading its effects to the people employed in the police, ambulance and hospital services who are obliged to deal with addicts? Is it not a fact that there is genuine concern in these services that complacency in high places has been shown because such instructions came so late in the day? Is the Minister convinced that the steps now taken will give the appropriate protection to those who come into contact with drug addicts?

Mr. MacKay: It is indeed a serious problem, and it is worth stressing that an increase in the incidence of hepatitis B is one of the consequences of drug addiction. We are following the advice of the expert joint committee on vaccination and immunisation. We are also considering the point about police officers, in consultation with the Association of Police Officers. There is a very successful immunisation against hepatitis B which can be carried out on anyone who thinks that he has been in contact with sufferers in such a way as to be in danger of contracting the disease.

Trunk Roads (Midlothian)

Mr. Eadie: asked the Secretary of State for Scotland if he will make a statement about his proposals with regard to trunk roads in Midlothian, and especially the A7 and A68.

Mr. Ancram: The major schemes planned for possible starts in the period 1986–89 are the A7 Dalkeith by pass and Middleton bypass, the A68 Dalkeith bypass, and the A702 Hillend improvement. A minor improvement to the A68-A6137 junction is planned for this year.

Mr. Eadie: Is the Minister aware that the A7 bypass is essential for industrial development in Midlothian and that the A68 bypass is urgently needed for Dalkeith? Members of Midlothian council have been told that the A7 bypass is subject of reassessment because the previous assessments were incompetently handled. How does that square with the Minister's answer? Is it not time that this bungling incompetence ceased so that the bypasses can be built?

Mr. Ancram: For the A7 project, the last economic assessment produced a negative result. Lothian regional council, the agent authority, has been asked to carry out


a reassessment using different traffic assignments to see whether an economic and viable scheme can be produced. I understand that this is because in past assessments insufficient account was taken of the future effects of the Edinburgh outer city bypass on traffic flows at Eskbank. If all the work is completed we would still hope to start the scheme before 1989.

Oral Answers to Questions — SOLICITOR-GENERAL FOR SCOTLAND

Trials (Tape Recordings)

Mr. Dalyell: asked the Solicitor-General for Scotland whether, in the light of the case of Sergeant Jamieson of Bo'ness, he will discuss with procurators fiscal the use of tape recordings as evidence in Scottish courts.

The Solicitor-General for Scotland (Mr. Peter Fraser): I understand that the hon. Member's question relates to the tape recording of evidence given in summary trials in Scottish courts for use in appeals. I have no plans at present to discuss such tape recordings with procurators fiscal in the light of the case to which the hon. Gentleman refers.

Mr. Dalyell: Is the objection based on cost?

The Solicitor-General for Scotland: The hon. Gentleman may recall that when he first raised this with the previous Lord Advocate he suggested changes in the way in which adjustments to stated cases were put before the Appeal Court. He will also recall that those very changes were introduced in the Criminal Justice (Scotland) Act. I am satisfied that in that respect the appeal procedure is now working very much better.

Mr. Maxton: asked the Solicitor-General for Scotland when he will meet procurators fiscal to discuss the use of tape recordings as evidence in Scottish courts.

The Solicitor-General for Scotland: I have no plans at present to do so. After evaluation of the experiment carried out on behalf of the Scottish Home and Health Department between 1980 and 1983 in Falkirk and Dundee, and latterly also in Aberdeen and part of Glasgow, it will be for my right hon. Friend the Secretary of State to decide whether tape recordings of police interviews should be introduced in Scotland on a formal basis. Thereafter it may be appropriate for my noble and learned Friend the Lord Advocate and myself to meet procurators fiscal or to issue guidance to them.

Mr. Maxton: Is the Minister aware that promises were made in Committee on the Criminal Justice (Scotland) Bill to the effect that the use of tape recordings would be introduced as soon as possible to provide some safeguard against the wrongful use of detention? When will that take place, or is the delay to continue indefinitely?

The Solicitor-General for Scotland: I well recall the considerable debate that took place on tape recording and the subsequent agreement that an experiment should take place, which was then carried out. The hon. Gentleman will also be aware that my right hon. Friend the Secretary of State for Scotland has already told the House that the Government intend to publish the results of the experiment in the form of a consultation paper before any final decisions are taken about the future of tape recording of police interviews in Scotland.

Mr. Fairbairn: Does my hon. and learned Friend appreciate that tape recording has resulted in grave difficulties in the proper presentation of evidence for the conviction of those who are guilty and that if it were introduced it would result in an impossible situation—

Mr. Maxton: The hon. and learned Gentleman was down there on the Front Bench making the promises.

Mr. Speaker: Order.

Mr. Fairbairn: —in which the police would never know what evidence was acceptable or admissible or what questions were allowable but not admissible. The result would be that many guilty people would be acquitted, and the innovation would be of no benefit to the innocent.

The Solicitor-General for Scotland: I am bound to accept that, after the introduction of the tape recording of police interviews, a number of cases came before the courts that probably made it more difficult for police officers to understand how far they could go in the examination of suspects. However, following the first reference by the Lord Advocate to the Court of Appeal, the situation has been clarified for police officers. After what was said by the Lord Justice General, I hope that police officers understand just how far they can go, what questions would be fair for them to put to suspects at the police station and which, on the other hand, would be improper.

Mr. Maclennan: Why has so much time elapsed since the conclusion of the experiment without the Government letting us know their own views?

The Solicitor-General for Scotland: The results of the experiment are being collated. My right hon. Friend the Secretary of State for Scotland has made it clear that those results will be published for wider public consultation in the form of a consultation paper. The experiment was first set up in two places and subsequently extended to Aberdeen and Glasgow. This is a difficult matter and the Government are proceeding in a sensible and cautious way in considering the introduction of such changes.

Mr. Dewar: The Solicitor-General for Scotland must accept that, even by the standards of this place, and bearing in mind the movement of Governments, the time lag has been quite noticeable. Will he study the written answer in the Official Report of 10 January giving details of the favourable experiences in Leicester and, I believe, five other areas of England, where experiments have been conducted? After five or six years, we should have at least have reached the stage of formal consultation. When will the consultation paper be published?

The Solicitor-General for Scotland: That is a matter for the Secretary of State for Scotland. As I have already made clear to my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn), it has taken sometime for cases to come before the appeal courts that clarify the rights and duties of police officers in conducting interviews. That being so, I do not consider that there has been undue delay in carrying out a difficult and important experiment.

Mr. Speaker: Order. In fairness to the hon. Member for Edinburgh, Leith (Mr. Brown), whom I did not see rise, I will, exceptionally, call him now.

Mr. Ron Brown: Will the Solicitor-General for Scotland apologise to Mr. David Hamilton and pay him the appropriate sum of compensation for the period that he spent in gaol?

The Solicitor-General for Scotland: Mr. Hamilton was brought before the court in Edinburgh shortly before Christmas. He was allowed the opportunity of a fair trial before a sheriff and a jury, and he was acquitted. I believe that justice was done in the normal way, and that the hon. Gentleman should be satisfied.

Coal Industry Dispute

Mr. Foulkes: asked the Solicitor-General for Scotland how many people charged with offences arising out of the mining dispute have been refused unconditional bail; and, of these, how many had previous criminal convictions.

The Solicitor-General for Scotland: As at 9 January 1985, 20 persons had been remanded in custody after appearing in court charged with offences arising out of the mining dispute. Of the 20 persons, two were subsequently released on appeal and one immediately changed his plea to that of guilty. As some persons still await trial, it would be inappropriate to release information about previous convictions. Information on the imposition of any special conditions of bail is not available centrally.

Mr. Foulkes: Will the Solicitor-General for Scotland confirm that it is not normal to refuse unconditional bail for first offenders and that, by doing so, the courts—especially the sheriffs courts at Dunfermline and Kilmarnock — are acting in a political manner that is quite unacceptable and are deliberately trying to intimidate pickets and limit their activities? Will he confirm that such behaviour is improper, and say what action he intends to take?

The Solicitor-General for Scotland: The only thing that I should have thought improper is the hon. Gentleman's attempt to attack sheriffs—

Mr. Foulkes: I am protecting my constituents from them, and the Solicitor-General should be as well.

Mr. Speaker: Order.

The Solicitor-General for Scotland: The hon. Gentleman knows that that is not the case. If people believe that their applications for bail should not have been refused, there is a clear and speedy appeal procedure to enable them to have the bail decision reviewed by a High Court judge. As I said in my original answer, on the two occasions when that has been done, the appeals have been sustained.

Mr. McKelvey: asked the Solicitor-General for Scotland how many prosecutions related to the coal dispute have been dealt with by Kilmarnock courts to date.

The Solicitor-General for Scotland: As at 9 January 1985, 92 prosecutions for offences arising out of the mining dispute had been dealt with in Kilmarnock courts.

Mr. McKelvey: Notwithstanding the answer that the hon. and learned Gentleman gave my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), does he share the anxiety that many of us feel that there is a hint in some press reports that there has been some political collusion in regard to miners arriving at courts and being tried? There should be some form of inquiry into police activities in Ayrshire during the strike and how matters have been dealt with in court.

The Solicitor-General for Scotland: If the hon. Gentleman is making allegations about the conduct of judges in Scotland concerning political interference in the administration of justice, he should do so through a substantive motion to be presented to the House, rather than rely on repeating broad and unfounded allegations without giving any detail of the circumstances in which such political motivation is said to have occurred.

Questions to Ministers

Mr. Peter Hardy: On a point of order, Mr. Speaker. You might be aware, Sir, that some English hon. Members think that the Government's forestry policy is deplorable. In view of that, could you look into the new circumstances that have developed as the Government have transferred forestry responsibilities to the Secretary of State for Scotland? Is it not clear that our Scottish colleagues have quite enough to do in representing their constituencies without encouraging English Members to intervene in Scottish questions to pursue this matter? In view of the implications of the change, would you examine the matter urgently?

Mr. Speaker: The issue of who is responsible for answering questions is not for me. I noted the question tabled by the hon. Member for Wentworth (Mr. Hardy)—No. 19—and I am sorry that we did not reach it.

Mr. Willie W. Hamilton: On a point of order, Mr. Speaker. You will have noticed, Mr. Speaker, that, of the 36 questions which were tabled today for oral answer, only four were in the names of Conservative Members. As that demonstrates Conservative Members' singular lack of interest in all matters appertaining to Scotland, why do you think it worth while to call them to ask supplementary questions? They have asked 12 today on questions that they did not bother to table.

Mr. Speaker: I try to be fair to the House and am the first to appreciate that there are more Scottish Members on the Opposition side than on the Government side. If the hon. Member for Fife, Central (Mr. Hamilton) examines the Order Paper, he will see that, with the exception of those hon. Members who tabled question No. 19, which has already been mentioned, question No. 23, question No. 24, question No. 27—the hon. Gentleman's—and question No. 31, all right hon. and hon. Members present in the Chamber were called today.

Mr. Hamilton: Not me—I was not called.

Mr. Dick Douglas: On a point of order, Mr. Speaker. I hesitate to raise this matter, as I

probably could have written to you about it, but it affects virtually every right hon. and hon. Member. You cannot have failed to notice, Mr. Speaker, that on today's Order Paper, many right hon. and hon. Members are seekers after wisdom in trying to elicit from the Prime Minister her official engagements for 29 January. There are well over 100 such questions. Would you reflect on the fact that, if there is a possibility of only the first five questions on the Order Paper being aired, it is tantamount to a lottery? Why do we not consider making a change so that Members who wish to ask the Prime Minister on a Tuesday or a Thursday open questions — that is what they are — have their names put in a lottery and Members who wish to ask specific questions are not denied the opportunity? Perhaps there might be an extension of Question Time. We have really institutionalised this practice which takes up a lot of time for Members, printers and others. The practice is unproductive, unacknowledged and not understood outside the House.

Mr. Speaker: The answer to that question is that it is entirely up to right hon. and hon. Members as to what questions they put down to the Prime Minister. [Interruption.] Well, it is. It is up to them whether they put down definitive questions or open questions. Anyway, all these questions go into what I understand is called the shuffle. To that extent it is a lottery as to whether one comes out early or late. The matter is entirely in the hands of hon. Members. If the hon. Gentleman feels strongly about it, he might well raise it with Procedure Committee.

Mr. Nicholas Fairbairn: On a point of order, Mr. Speaker. Is it in order for an Englishman who represents Central Fife, who has no residence in Scotland and who normally lives in England, to complain about the activies of Scotsmen? Is that not contradicting the legislation on racism of which he is such an adherent?

Mr. Norman Buchan: Further to that point of order, Mr. Speaker. Is it proper to say that anyone who lives in a castle is properly domiciled in Scotland?

Mr. Speaker: I will not get myself involved in this. So far as I am concerned, the hon. Members represent Scottish constituencies.

Leaseholders (Choice of Insurers)

Mr. Robin Corbett: I beg to move,
That leave be given to bring in a Bill to allow a leaseholder to choose the company with whom he insures his dwelling from a list of approved insurance companies.
This is a small but none-the-less important Bill. Its purpose is to extend freedom of choice over property insurance to the leaseholders of about 1,400,000 flats and homes in England and Wales to whom this is denied. Landlords can and do dictate the company with whom leaseholders are required to insure. Certainly there is financial gain for the landlords by way of commission. It is not always the case that the commission is translated into lower premiums for the leaseholders. It may be argued that this compulsion is in the best interests of leaseholders who, where large numbers of properties are involved, can get acceptable cover for discounted premiums. That is about the best face which can be put on this dubious practice.
Let me give an example of what happens in practice, helpfully provided to me through the Consumers Association. Fountaine Freeholds Limited, which inconveniently operates from a post office box number in St. Helier, Jersey, wrote to a leaseholder saying it had bought the freehold of the property. The letter said:
We have specific requirements as to Insurers and shall notify you of these in due course. In the meantime, and as so required by your Lease, please let us have your existing Policy of Insurance and the current receipt for premium.
A separate undated letter to the leaseholder said:
Under the terms of your lease, you covenant with your Lessors (that is us) to insure your house and all other buildings which may be upon the land in the joint names of the Lessors and Lessees in some Insurance Office to be named from time to time by the Lessors to the full value thereof. Previous Lessors did not have a policy of directing insurance but with a view to good Estate Management, the policy of this Company is to have all freeholds owned by us insured in one office.
It then added threateningly:
It may well be that neither you nor your Building Society will want to change insurers. We must make it very clear that no Building Society has the power to insist that you insure with any particular Company. We, as your Lessors, do have such a power"—
the next words are underlined—

and we shall insist that our nomination be followed.
The letter went on:
those who fail to carry out our direction as to insurance, will commit an immediate and serious breach of covenant in respect of which we shall serve Notice upon the Lessee under Section 146 of the Law of Property Act 1925 with a view to the commencement of proceedings to forfeit the Lease.
It warned:
Your Lease also contains a provision for the Lessee to pay all the Lessors' costs, charges and expenses which may be incurred by the Lessors in or in contemplation of any such proceedings. These costs would be substantial.
This high-handed action is all the more unacceptable in this day and age, because the cover insisted on by the nominated company was at the standard rate of 15p per £100—no bargain there for the leaseholder, but a nifty commission for the heavy-handed landlords.
As the British Insurance Brokers Association says about the lack of choice of insurers:
Members of the public … could be forgiven for feeling that they are being forced to purchase something they do not want … They find themselves locked into a long-term financial arrangement which denies them a choice of borrowers from another institution".
This practice is outrageous, unfair and extortionate. My Bill will put paid to it by insisting that leaseholders have the choice of not less than three insurers. This will help householders, encourage proper competition and will enable brokers and insurance companies to be able to bid for business which is now cosily enforced with the threat of the loss of a home to the leaseholders of almost 1·5 million flats and houses in England and Wales.

Question put and agreed to.

Bill ordered to be brought in by Mr. Robin Corbett, Mr. Bryan Gould, Mr. Lawrence Cunliffe, Mr. Tony Blair, Mr. Frank Dobson, Mr. Mark Fisher, Dr. John Marek, Mr. Stuart Randall, Mr. Allan Rogers, Mr. Clive Soley and Mr. Ken Weetch.

LEASEHOLDERS (CHOICE OF INSURERS)

Mr. Robin Corbett accordingly presented a Bill to allow a leaseholder to choose the company with whom he insures his dwelling from a list of approved insurance companies. And the same was read the First time; and ordered to be read a Second time upon Friday 1 February and to be printed. [Bill No. 59.]

Rate Support Grant (England)

The Secretary of State for the Environment (Mr. Patrick Jenkin): I beg to move,
That the Rate Support Grant Supplementary Report (England) (No. 2) 1984/85 (House of Commons Paper No. 81), which was laid before this House on 11th December, be approved.
It may, Mr. Speaker, be for the convenience of the House if we also discussed the following motions:
That the Rate Support Grant Supplementary Report (England) (No. 3) 1983/84 (House of Commons Paper No. 82), which was laid before this House on 11th December, be approved.
That the Rate Support Grant Report (England) 1985/86 (House of Commons Paper No. 142), which was laid before this House on 20th December, be approved.

Mr. Speaker: Is that acceptable to the House?

Hon. Members: Aye.

Mr. Speaker: So be it.

Mr. Jenkin: Before I describe the rate support grant reports, I should like to set them in context and remind the House of some of the facts about local authority current spending. This year in England—in this debate we are concerned only with England—such spending amounts to £24 billion, more than a fifth of total public spending. Its significance to the Government's overall economic strategy is, therefore, obvious, and both we and the previous Labour Government have rightly treated local Government current spending as a crucial element within public expenditure as a whole.
To illustrate this, I remind the House of the experience of former Ministers within the Treasury and the Department of the Environment when grappling with this problem. In his book "Inside the Treasury", Lord Barnett wrote:
For years current expenditure of local authorities had grown steadily under Conservative as well as Labour Governments. It was £5·5 billion in 1970/71 and by the time we took over it was £6.8 billion. We then proceeded to increase it substantially. By 1979, at 1975 Survey prices it was some £13 billion".
As he rightly said, that is a lot of money.
He went on:
The main source of control was the size of the RSG. As Chief Secretary I would be arguing for as low a grant as possible—Tony Crosland for his part, while reluctantly recognising the need to cut expenditure, feared that the squeeze of a lower grant would simply lead to large rate increases.
We all know who won that argument! The hon. Member for Copeland (Dr. Cunningham) was PPS to the Prime Minister at that time, and will no doubt remember how the battle went. Cutbacks in local current expenditure began under Labour; reductions in the percentage of Exchequer grant began under Labour; the system of cash limits on RSG began under Labour. The House will listen with care to see whether the Labour party in Opposition condemns the policies which it followed in office and which it knew to be necessary.
In the 1960s and 1970s, local authority current expenditure was growing in real terms on average at 3·5 per cent. a year. Between 1952 and 1979 the numbers employed by local government had doubled. By 1979 they had reached the all-time record of 2·51 million—11·5 per cent. of the total labour force in local government.
Thanks partly to successive rate support grant settlements since then and thanks, certainly, to better management by many councils, that growth in spending

has been reduced to a little below 1 per cent. on average per year. Manpower levels have dropped by over 4 per cent.
It is right to pay tribute to what many councils have achieved in making themselves more efficient. It is also right that the pressure to control spending should be sustained. [Interruption.] I am astonished that the hon. Member for Blackburn (Mr. Straw) should make that comment. Does he really regard local government as a form of outdoor relief, simply to provide jobs to keep unemployment down? Of course he does not, and his party never did.

Mr. Jack Straw: The House may not have heard what I said. I said that the Secretary of State was praising local authorities for forcing up unemployment. The Secretary of State must regard local authorities as a form of outdoor relief. I believe that local authorities provide vital services, in many cases to assist those thrown out of work by this Government's policies.

Mr. Jenkin: The hon. Gentleman is trying to deny what he said. Of course, it is the job of local authorities to provide services as efficiently, economically and as effectively as possible. There is no doubt that, thanks to much better management by many councils and the pressure of the rate support grant, many councils are doing just that.

Mr. Tony Marlow: We have just seen a show of indignation from the Opposition Front Bench. The whole issue has been accompanied by indignation from the Labour party. Is it not worth noting that fewer than a dozen Labour Members are in the Chamber for this important debate.

Mr. Jenkin: That is a fair point.

Mr. Patrick Cormack: Will my right hon. Friend give way?

Mr. Jenkin: May I develop my argument?

Mr. Cormack: I am grateful to my right hon. Friend. It is important to put on record the fact that not only Labour Members are incensed, because some prudent Conservative-controlled councils with excellent records, such as mine, are suffering deeply as a result of what has happened.

Mr. Jenkin: I have no doubt that my hon. Friend the Member for Staffordshire, South (Mr. Cormack) will have an opportunity to make his point if he catches your eye, Mr. Speaker. What he says does not detract from the fact that many councils have made strenuous efforts to make themselves more efficient. The gainers are their ratepayers.
Reining back expenditure has benefited domestic ratepayers, householders and businesses. In each of the last five years the average rate increase has fallen, despite annual panic stories from the Opposition. Last year the average rate increase was only 5·5 per cent.—the lowest in 10 years.
Therefore, we have disproved Tony Crosland's fears, as recorded by the noble Lord Barnett, that a falling percentage of Exchequer grant necessarily means steep rate increases. On the contrary, a falling percentage of grant has been accompanied by a fall in the rate of growth of spending and, therefore, by a steadily reducing rate of increase in local rates. A great many authorities have


managed to sustain or even improve the level of services by making themselves more efficient. There are still plenty of opportunities for that.
The third supplementary' report for 1983–84 adjusts block grant entitlements for that year in the light of the latest information. The second supplementary report for 1984–85 implements grant holdback for Liverpool. The House will remember that its budget came too late for last July's supplementary report. Therefore, it is a necessary adjustment.
The main interest in today's debate lies in the report setting out the settlement for next year, 1985–86. I shall deal separately with its three elements—targets, total grant and distribution of grant between authorities.
The key feature of the settlement is that all authorities budgeting to spend more than 0·75 per cent. below their GREA this year can increase their spending next year by at least 4·5 per cent. without incurring grant penalty. For the lowest spenders—those whose budget this year is at or below target as well as below GREA—the increase is slightly higher—up to 4·625 per cent. over this year's budget.
I can, therefore, claim to have set targets for the low-spending authorities and fulfilled the undertaking that I and my hon. Friend the Under-Secretary gave to the House during last year's debate. That has been recognised by many of the councils concerned. Many low-spending authorities have acknowledged that the targets are more favourable than the targets that they have been set previously.
The other side of the coin is a tougher holdback schedule for authorities that spend above their targets. It must be remembered that this year 84 per cent. of all authorities are budgeting to spend within 2 per cent. of their targets. Next year, with the more realistic targets, I hope that that figure will be even higher so that fewer ratepayers will bear the costs of council overspending. Higher current spending means higher rates, which mean lower profits for industry, which means less investment, which means fewer jobs. The connection between those facts is absolutely irrefutable.

Mr. Tony Banks: Another argument is that lower spending means fewer services and lower levels of service. The right hon. Gentleman said that the low spenders last year will be rewarded by better targets next year. Can he explain — especially to his Conservative colleagues—why the GLC, which he has always accused of being a high spender, has had a 63 per cent. hike in its target for next year over last year? I am sure that his colleagues will be interested in his answer.

Mr. Jenkin: The hon. Gentleman is, of course, seeking to throw dust in the eyes of the House. He is talking about a comparison of target over target. The real comparison, on which authorities have always focused, is based on what their spending is this year, what their budget is this year, what they expect to spend and how much they can increase on that next year. They want to know what is their margin and headroom. The GLC is, indeed, a massive overspender, and I do not expect it to be entitled to any rate support grant—or only a nominal amount—because it is so far in excess of its target. Judging by the cries of woe from county hall, I do not think that many of my hon. Friends will suspect that we are letting off the GLC lightly.

Mr. Michael Hancock: How can the right hon. Gentleman equate what he has just said with the position in Hampshire, which has stuck religiously to the guidelines set by the Government but which will suffer worse than any other county council in England next year, having about 7 per cent. less cash to spend?

Mr. Jenkin: The hon. Gentleman has misunderstood the point. Hampshire is one of those authorities which, because it is budgeting this year both below its target and the GRE, falls squarely within our definition of a low spender. It therefore has a target hike above this year's budget that is the highest of any authority—4·652 per cent.
I recognise that a number of low-spending authorities say, "That is all right for this year and we can manage for 1985–86, but we face real difficulties in 1986–87." I appreciate that a number of my hon. Friends are concerned about that. They will understand that I cannot at this stage give detailed figures for individual authorities for 1986–87, though I hope to be able to make a helpful comment.
I repeat what I have said, that I should like to be able to abandon targets and holdback. While it has undoubtedly helped to rein back the growth of local authority' current spending, I understand those who argue that, coming on top of the system of block grant and the quite sophisticated system of taper, it makes for complications and difficulties.
Much depends on the level of local authority spending in the coming year and on what alternative pressures there can be to achieve delivery of the Government's public expenditure plans. I am considering this urgently. I can say no more on that today. In what follows, therefore, I am assuming that the target system is to be retained for 1986–87.

Mr. Charles Morrison: I am grateful to my right hon. Friend, not only for what he has said but for what he has done for some shire counties, not least for mine in Wiltshire, in relation to target. Is he aware that those who represent shire counties will support him strongly in his desire to abandon targets in 1986–87 and in the battles that he may have with the Treasury, because if those targets are not abandoned, or at least considerably relaxed, the situation in the shire counties will become impossible? They are managing this year only as the result of balances. They have juggled their finances for years, but next year will be the crunch year and if there is not a major relaxation life will become impossible for them and services will have to be severely cut.

Mr. Jenkin: As to whether we shall have targets, I cannot say more than I have said today. The more favourable targets that I have given low-spending authorities for 1985–86 have been made possible because of the savings achieved from rate capping the high spenders. I made that clear last year. Rate capping will continue to produce savings in the years after next, in 1986–87 and thereafter, as we continue to bring down what we have no difficulty in recognising as the excessive spending levels of authorities selected for rate capping under the Rates Act. I repeat that low-spending authorities will benefit from that rate capping. They will benefit next year and we will want that to happen again in the year following.

Mr. Roger Gale: My right hon. Friend has said that he intends to maintain target. Does he accept


that in Kent the gap between target and GREA is £37 million? If he is to retain target, the logical extension of that must be to abolish GREA.

Mr. Jenkin: My hon. Friend is aware that GREA is the basis of the distribution of rate support grant. I cannot take my hon. Friend's suggestion at face value, but I recognise the argument that he is advancing.
For authorities that budget in the coming year — 1985–86 — to spend at or below both their target and their GREA, the targets for the following year —1986–87—will take account of the further savings to be achieved from rate capping the highest spenders. A number of authorities have wanted me to make it clear that this is not a one-off position for this year. Rate capping will continue and that will enable us to continue to pursue the policy that I have been describing.

Sir Ian Gilmour: I appreciate that my right hon. Friend is trying to help the House. Does he agree that unless the system is changed fundamentally—that does not mean a few adjustments because of rate capping — and the target system is abolished, many shire counties will be in an impossible position? Will he undertake to ensure that the present system is not preserved into next year?

Mr. Jenkin: I understand entirely how my right hon. Friend and others feel. I have made it clear in previous debates, and I do so again today, that the Government are anxious to dispense with the target system as soon as they can. However, I cannot go further than what I have already said this afternoon. We are studying the matter urgently and if it proves possible to dispense with the target system, nothing will give me greater pleasure than to do so. However, I cannot make a commitment to the House about next year.

Mr. Simon Hughes: If the Secretary of State is saying that he is reconsidering the target system I ask him to make one other suggestion to his Department for its consideration. He will know that there is now a discrepancy in rate-capped authorities between the rate-capped limit and the target limit. Some authorities which spend up to the rate-capped limit will incur penalty because they have spent over target. If he tells the House that he considers that to be inadequate and unsatisfactory, there will be some light at the end of the tunnel for high-spending authorities which are high-need authorities, which presently have an equal if greater cause for complaint than low-spending and low-need authorities. The high-spending and high-need authorities are now facing total darkness.

Mr. Jenkin: The feature to which the hon. Gentleman has drawn the attention of the House was debated exhaustively during our proceedings on the Rates Bill. Had we not maintained the gap between target and the expenditure limit, there would have been great unfairness to other authorities which are close to the level of rate-capping but which are not being capped. They would have suffered an even greater penalty on their spending than capped authorities, and that would have been unfair.

Mr. Norman Atkinson: rose—

Mr. Robert C. Brown: rose—

Mr. Jenkin: No, I shall not give way. There are many hon. Members who wish to contribute to the debate and I wish to press on with my remarks.

Mr. Atkinson: rose—

Mr. Jenkin: No, I shall not give way. I have given way a good deal already. We are not discussing rate capping today. There will be an opportunity to discuss the issue when we place, if we have to, the orders before the House.
If all local authorities had shown responsibility, equal to that of those on behalf of which my right hon. and hon. Friends have been intervening, and if Labour authorities had continued to follow the policy of the Labour party under a Labour Administration there would have been no need to enter into the business of targets and to have imposed some of the measures for which we are criticised by local government.
The picture is startlingly clear in the current year. Total overspend above targets is £850 million, and 75 per cent. of that overspend comes from 12 local authorities, every one of which is Labour-controlled.
I turn from targets to Exchequer grant—

Mr. Richard Holt: rose—

Mr. Jenkin: I hope that my hon. Friend will forgive me for not giving way to him. I must press on. As I have said, many hon. Members wish to contribute to the debate.
The total grant figure in the settlement is £11·8 billion. That is about the same in cash terms as that for the current year. As has been said, this represents a lower percentage of next year's planned expenditure. It will be 48·7 per cent. compared with 51·9 per cent. in last year's settlement. We have reduced the grant expenditure percentage in each year since 1979 and on each occasion there have been scare stories, not least from the Opposition Front Bench, of massive rate increases going far beyond anything we have experienced. The fact is that each year the average rate increase has been lower than in the previous year.

Mr. Tony Banks: On average, yes.

Mr. Jenkin: Of course. There will be a variety of rate increases. I am not quarrelling about that. The key point is that cutting the grant percentage adds to the pressure that we put on authorities, as Lord Barnett has said, to find economies in their spending and reduce spending, which leads to lower rate increases.
In the debate on this matter which took place last year, the hon. Member for Copeland said:
Most ratepayers would face steep rates increases in the spring as a direct result of the Government's policy".—[Official Report, 23 January 1984; Vol. 52, c. 646.]
We know what happened. The average rate increase was 5½ per cent., which was the lowest for 10 years. It is worth noting that the cut in percentage terms this year is less than the cut of four and a half percentage points which the Labour Government imposed in 1977–78. I hope that on this occasion the hon. Member for Copeland will keep his scaremongering to himself.
I repeat what I have already said to the House. If local authorities budget to meet their targets next year, the average increase at ratepayer level—I stress "average" —should be even lower than this year's 5½ per cent. I stress that that is an average figure. The figures for individual authorities are bound to vary as their grant entitlement changes.

Mr. Peter Hordern: I thank my right hon. Friend for showing his invariable courtesy. He has referred to rate support grant. Will he address himself to low-spending authorities such as West Sussex, which he told us last year would receive special attention as low spenders and whose target was considerably below GREA? The same authorities, which he assured would be treated more favourably if they went over target, now find that the penalties for doing so are to be increased substantially. Will he give some assurance to the x j 1lowest-spending authorities of all — I know of no lower-spending authority than that of West Sussex—which will have inescapably to spend more towards its target to approach what the Government believe is the proper proportion of expenditure that it should incur?

Mr. Jenkin: My hon. Friend knows a great deal about these matters. With respect, I do not think that I can go further on target for the following year than what I have already said. I have said in reply to my hon. Friend the Member for Devizes (Mr. Morrison) and other of my hon. Friends that we intend to continue the process while recognising the position of the very low spenders. I believe that they appreciate that we have done a great deal for them for next year. [HON. MEMBERS: "No."] The county of my hon. Friend the Member for Horsham (Mr. Hordern) has had one of the greatest increases in target of 4·625 per cent. That is likly to be ahead of the rate of inflation.

Mr. Charles Irving: rose—

Mr. Geoffrey Rippon: rose—

Mr. Jenkin: When I deal with distribution of grant, I hope to be able to show my hon. Friend the Member for Horsham that we have taken account of the position of the lowest spenders.

Mr. Rippon: My right hon. Friend talks about 1986–87 and he is talking inevitably about national averages. Does he realise that many areas are concerned about 1985–86? There are sparsely populated rural areas in Northumberland which have special problems and such authorities are not susceptible to having their problems dealt with in terms of the national aggregate.

Mr. Jenkin: I know that my right hon. and learned Friend will recognise that Northumberland is a county which could not be described as a low spender. It has not budgeted as economically as it could and, therefore, it would be entirely consistent with what I have said to other of my right hon. and hon. Friends not to give the same target latitude to such counties as that which we have been able to give to the lowest spenders. That was the pledge I gave to the House at this time last year.
I know that the sparseness of population was a matter discussed by the five local authority associations and my officials when refining the grant-related expenditure assessments. It is a question not only of the size of the grant but of its distribution. The 1985–86 settlement incorporates rather bigger changes in GREAs than have been made in recent years. Some arise from the decision by my right hon. Friend the Secretary of State for Transport to pay transport supplementary grant only on capital expenditure on roads and traffic management schemes from next year. As a result, revenue expenditure on highway maintenance and passenger transport support will, in future, be supported through block grant. There are, therefore, entirely new GREAs for those two services.
I have introduced new and improved GREAs for the recreation service that takes more account of actual use by visitors and commuters. That point was pressed on the Government by a number of my hon. Friends. I have introduced amended GREAs for housing that reflect more accurately the support given to the housing revenue account from the general rate fund.
Of course, a number of authorities have made it clear to me that they are unhappy about the reduction in their grant entitlements arising from these GREA changes. Although I sympathise with the problems this can cause individual authorities, I must point out that it cannot be right to freeze, for all time, the GREAs in their present form simply because there are bound to be some losers as well as gainers. The changes I have made this year represent real improvements in the fairness of GREAs and, therefore, in the fairness of the system of distribution of block grant.
A further change I have made for 1985–86 is to give more of the available grant to authorities spending at or below GREA. I come now to the point made by my hon. Friend the Member for Horsham. As with targets, my objective is to recognise the achievements of low spenders. For 1985–86, spending in relation to GREA will be a more important factor in determining grant entitlements. Correspondingly, the marginal costs in terms of the taper of the grant for those authorities that spend above GREA will be higher. This reinforces our policy of targets and of recognising the difficulties faced by low spenders.

Mr. Straw: Will the right hon. Gentleman confirm the figures he has given in parliamentary answers that, if all authorities spent at GREA, many Conservative shires would suffer massive loss of grants? West Sussex would receive no grant at all for this year and Cambridgeshire would suffer a loss of £26 million in grant. Paradoxically, so-called overspending by higher needs authorities is keeping the rates lower in the lower spending authority areas.

Mr. Jenkin: I agree with the figures but not with the hypothesis the hon. Gentleman postulated. A great many authorities find that they can give their communities a perfectly adequate and acceptable level of service and can, through greater efficiency, spend lower than the GREAs. They are to be commended.

Dr. John Cunningham: rose—

Mr. Jenkin: I should like to respond to the point made by my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour).

Dr. Cunningham: rose—

Mr. Jenkin: I have given way to the hon. Member for Blackburn (Mr. Straw) on the Opposition Front Bench. The hon. Member for Copeland can make his point when he makes his speech. I and many hon. Members on both sides of the House appreciate the fact that the system of local government finance has become increasingly complex. Even the terminology we must use is double-Dutch to most laymen. The important point is that, the more difficult it is for people to understand a system, the harder it is to persuade them that it is fair. I understand that, and that is not the least of the reasons why I asked my right hon. Friend the Minister for Local Government and my hon. Friend the Under-Secretary of State to


undertake a series of studies of the whole field of local government finance. Those studies are well under way. Rate support grant settlements in England distribute almost £12 billion of Exchequer cash in support of £24 billion of local authority expenditure by more than 400 very different local authorities. Simplification is always an important objective, but so is equity. We must remember that fact.
This year, 84 per cent. of authorities are spending at or close to their targets. They include authorities of all categories and all political colours. They have managed to do so without what is sometimes described as catastrophic service cuts. Targets for next year are more favourable for most authorities than they were this year. Doubtless, we shall again be told of the services that must be slashed, but all the evidence suggests that that is nothing but wild exaggeration. The point is that the targets we have set are realistic.
Another point I should like to make clear concerns the equity between responsible authorities, which have made efforts to find economies and the minority which have not. This is an important aspect that has been pressed on the Government year after year by my hon. Friends.

Mr. Robert C. Brown: rose—

Mr. Jenkin: I am coming to the end of my speech, so I shall not give way.
Three quarters of this year's overspend comes from just 12 local authorities, all of them Labour-controlled. We are now leaving behind the days when the responsible low-spending majority of authorities had to be asked to find substantial economies to compensate for the massive overspends of the irresponsible minority. We deliberately introduced rate capping to escape from that position. Selection of 18 authorities for rate capping next year should mean that actual expenditure will be £400 million lower than it would have been if the authorities had continued on their Rake's Progress of squandering as they have done in recent years. For 1985–86, I have used those savings to secure more favourable targets than ever before for low-spending authorities, and I proposed to continue to use them to help low spenders in 1986–87.
It is now for each local authority to make its budget and rating decision. This settlement sets the framework so that, if local authorities budget reasonably, they can continue to provide a reasonable level of services while protecting their ratepayers against excessive rate increases. I commend the report to the House.

Dr. John Cunningham: The Secretary of State in his opening comments tried to suggest that his policy was simply a continuation of the policies pursued by the last Government. I reject that suggestion as fundamentally dishonest. When the last Labour Government left office, they were providing 61 per cent. of council current expenditure by way of rate support grant. The Labour Government had no targets, no penalties and no individual controls over local councils, and they had no punitive Rates Act to undermine the local democratic process.

Dr. Keith Hampson: rose—

Dr. Cunningham: I shall not give way. I have just begun my speech.
This is the sixth annual report on the rate support grant introduced by the Conservative Government since taking office in 1979. Each year, the most significant feature has been the reduction in grant percentage paid by central Government to local councils. In 1979–80, the Labour Government provided cash to finance 61 per cent. of current council expenditure at a time when there was much lower unemployment, a much better social climate and much better circumstances than the appalling conditions that prevail today.
The report proposes to reduce cash support to councils for the sixth consecutive year to only 48·7 per cent. of their expenditure. The proposed reduction for 1985–86 amounts to £775 million compared with the fiscal year 1984–85.

Dr. Hampson: rose—

Dr. Cunningham: I am not giving way.
The curious and deliberate thing about the Secretary of State's speech was that he talked about targets for almost all of it. He never mentioned the reduction in grant and its impact on authorities, nor did he say that it was likely to cause problems, hardship or difficulties for the local authorities involved.

Dr. Hampson: rose—

Dr. Cunningham: I am not giving way.

Mr. Speaker: Order. I have heard the hon. Gentleman say on three occasions that he is not giving way. Many hon. Members wish to speak, and all interventions take up time.

Dr. Cunningham: The hon. Member for Leeds, North-West (Dr. Hampson) stood up to intervene within the first minute of my speech. I should tell him that my record on giving way is much better than the Secretary of State's. I shall give way to the hon. Gentleman when I have finished the introductory part of my speech. I have not yet gone beyond the first page.
The Secretary of State's persistent and deliberate policy of making significant annual reductions in the cash support for local councils is the root cause of all the problems that the Secretary of State's hon. Friend's have been quoting to him today. It causes unemployment, undermines the quality of community and public services, such as education, transport, meals on wheels, concessionary fares, and help for elderly and disabled people and for families who are suffering deprivation. That is the real impact of his policy and that impact will be continued as a result of his report.

Dr. Hampson: I rose immediately because the issue of whether the percentage rises or falls is at the heart of the hon. Gentleman's case. The Labour Government immediately raised it from 60·5 per cent. to 66·5 per cent. They found that that was unsatisfactory and reduced it progressively to the 61·5 per cent. about which he is now boasting. Even before that, during the Wilson Government, it was as low as 54 per cent. They have had it all ways. The hon. Gentleman should know better than to argue as he has.

Dr. Cunningham: My first response to the hon. Gentleman is that he is talking about two different systems. My second response is that in each year of the previous Labour Government, the percentage paid by that Government was higher than it has been in any one year of this Administration. That is the fundamental difference.
Ratepayers will again face increases in the coming year—there is no point in trying to disguise that—because the persistent and deliberate reduction in grant is the biggest factor and the most important reason why average domestic rates—that is what the right hon. Gentleman and his predecessors have talked about—have more than doubled since 1979. Average domestic rates have increased by 108 per cent. since the Conservative Government came to office.
Those burdens are a direct result of the Prime Minister's policies. It is significant, although not surprising, that she never attends these debates. She is never present to support the right hon. Gentleman, even in his most difficult times—and there have been many of those—because she has comprehensively betrayed the ratepayers by doubling rates and ratting on her promise, twice made, to abolish domestic rates.
Like young people who were promised work and real jobs by the Prime Minister—perhaps the biggest and most cynical betrayal of all — ratepayers will never forget the Prime Minister's promise to them, which was repeated in two general elections, that she would relieve them of the burden of domestic rates. After six years, she has succeeded in more than doubling rates, and the increase will continue.
In addition to the reduction in cash support for councils and ratepayers, the most important features of the report are the harsher financial penalties for councils which used their own money to uphold the quality of their services and to protect their communities; changes again in the principles used to construct the Whitehall-imposed targets for the fifth successive year; inadequate application of the Secretary of State's use of disregards; and the persistent and continued use of data which even the Audit Commission—the right hon. Gentleman's own creation —has described as open to serious question.
It is important to examine those matters in detail and, not least, to contrast their impact with the promises made to local government by the Secretary of State and his predecessors. The way in which councils' spending targets have been constructed by the Government means that 85 per cent. of the metropolitan councils will be required to make real cuts in expenditure.
Many of the areas with the greatest social need are again being asked to make the biggest cuts and to carry the heaviest burden. The Secretary of State, in paragraph 7 on page 4 of his report, when talking of expenditure provision, claims:
This should enable the Government's policies for individual services to be broadly maintained.
At best, that is an ambiguous statement. At worst, it is dishonest. Government policy is to reduce cash support for councils.
The two supplementary reports for 1983–84 and 1984–85, which are before the House, remove yet more grants from local councils through the operation of an increasingly punitive penalty system based upon arbitrary spending targets. For 1983–84 another £281 million passes to the Treasury. That is more than in the previous supplementary report. For 1984–85, the Treasury's windfall is £455 million—an increase of £3 million on the supplementary report approved in July 1984.
How can councils maintain their services in the face of persistent cuts in the real value of Government grant? They can do it by spending more of their own money raised

from the rates, by increasing rates to increase their revenue, or, as the Secretary of State suggested, by trying to improve their own efficiency.
Demands on council services are increasing because of the appalling social and economic consequences of the Government's policy. As the House is aware, millions more people today face hardship, deprivation and poverty compared with 1979. No improvement in the management of services could hope to offset the combined effects of major increases in demand and the cumulative withdrawal by the Government of more than £12 billion in real terms from council finances since 1979.
The Secretary of State seeks to impose his ceiling on every council budget as his authoritarian attitudes expand and engulf all aspects of policy. He reduces grants; imposes more drastic fines and penalties on councils which spend above his arbitrary Whitehall view of their necessary expenditure; and controls their rates. The outcome of that cannot be the maintenance of services. He does it regardless of the councils' performance or efficiency.
I give two examples to illustrate that point — one Labour, one Conservative. For three years the Stevenage council held the rate level. Last year it was reduced by 7·2 per cent. Despite that performance, the council now faces a loss of over £500,000 in grant because of changes in the methodology of calculating its entitlement. That council is spending at target. It is not profligate. It has not forced up rates year after year.
Sevenoaks district council is Conservative-controlled. The leader, Councillor Garner, has written to the hon. Member for Sevenoaks (Mr. Wolfson), and sent a copy of his letter to every member of the council, including Labour members. He said:
We have just received notification from the Department of the Environment that our block grant is to be reduced this year from £2,054,000 to £1,674,000 … a staggering reduction of 18·5 per cent. This means we will be forced to increase our rates by almost 20 per cent. next year, an increase which is entirely caused by central Government decisions.
He goes on:
Mr. Jenkins is reported as projecting average rate rise 'in low single figures'. Against such statements, how are we expected to explain to our ratepayers that their rate increase of 20 per cent. is entirely due to the capricious decisions of Mr. Jenkins' own department?
He adds a postscript to his letter:
Mark—we have had enough!
That is the comment of the Tory leader of Sevenoaks district council, and that is increasingly widely recognised by council leaders of all persuasions up and down the country.
The scope and quality of public services are undermined, provision is cut, redundancies occur, and vacancies are not filled. Those are, in reality, the aims of Government policy. In consequence, our towns, cities and boroughs begin to suffer neglect. Transport is threatened in rural areas. Education — surely a country's best investment — is undermined. The Government are increasingly enforcing a run-down, often second-class and inadequate public provision by their inadequate and increasingly incompetent administration of local government, and Conservative Ministers are determined to impose their view, regardless of the wishes of local communities as expressed in local council elections.
Councils trying to resist and to respond to the legitimate wishes and aspirations of the people who elect them are not only penalised but often subjected to petty abuse and


vilification. Elected councillors are increasingly and knowingly prevented from meeting their statutory obligations and duties by this Conservative Administration. That is true of a wide range of services, such as housing, planning, building control, public health, education, and provision for disadvantaged people. But a blind eye is turned to all those services by Ministers and their supporters in the House. Meanwhile, Ministers abuse their powers and act unlawfully.
Recently, the Secretary of State for Transport deliberately and unlawfully robbed the Greater London council of more than £50 million. Is he to be surcharged? Is he to be removed from office? The Secretary of State for the Environment does not have a very good record either in that respect, because he ignored his duties in respect of the GLC development plan. When the courts found against him, he ignored them, too, and changed the law. He is currently hiding behind the dubious interpretation of the Rates Act to disguise from the House his use of its powers to fix budgets for councils which he has quite deliberately "fitted up" to suit his own political purposes. It is squalid behaviour on the Secretary of State's part that he does not tell the House about his assumptions in the application of a highly contentious and fundamentally important Act of Parliament.
The Secretary of State's claim that the Rates Act is designed to protect ratepayers had a very hollow ring when contrasted with his proposal today to reduce by £775 million the support that the Government are providing to them. His argument that rates increases would be in single figures ignores the real impact of what he is doing and is contradicted by the Association of Metropolitan Authorities, the Association of District Councils and the Association of County Councils, all of which condemn the report. The Secretary of State also misleads when he pretends that rates can be held down without serious consequences for jobs and services.
The effect of trebling penalties is punitive in the extreme. For spending of just 1 per cent. above an arbitrary and imposed ceiling, councils will be clobbered. Currently, 110 authorities spend at just 2 per cent. over target, and altogether 138 authorities—about one third of all councils — are being penalised because they choose not to accept a Whitehall-imposed ceiling on their budgets. Ironically, the savage increase in penalties, as the hon. Member for Horsham (Mr. Hordern) pointed out, will affect low spending councils worst of all. In addition, those extreme penalties on councils further blur local accountability by placing elected councillors in the invidious position of determining policies not by assessing local needs and desires, but by reference to the punitive extra cost enforced by central Government.
The dubious use by the Government of grant-related expenditure plumbed even new depths when Ministers' manoeuvring over council housing finance, using the so-called "E7 factor", came to light as a result of a leaked document a few months ago. Those calculations are crucially important for many housing authorities. In the leaked document last September, the Under-Secretary of State, the hon. Member for Ealing, Acton (Sir G. Young), described his own civil servants' study of the issue as "political dynamite", because it showed that the

Department had been unfair to several authorities. A cover-up then followed, and the full picture was never revealed, either to the local authority associations or to the House of Commons.

Mr. Patrick Jenkin: rose—

Dr. Cunningham: I shall give way to the right hon. Gentleman, although today, as on the last occasion that he spoke, he refused to give way to me.

Mr. Jenkin: I absolutely refute the hon. Gentleman's charge that there was a cover-up. On the contrary, the documents were circulated widely to the local authority associations. The hon. Gentleman tries to pretend that some copies of the document were leaked. They were to be found in the offices of every local authority association in England. The hon. Gentleman's comment is a damp squib. The authorities welcomed the changes in GRE that we have introduced. Is the hon. Gentleman saying that we should not have studied that reaction?

Dr. Cunningham: I question what the right hon. Gentleman has just said to the House, because copies of the leaked document were not available in that form to local authorities; nor were the written comments of the right hon. Gentleman's junior Minister, describing the document as "political dynamite", available to the local authority associations.
The point is worth developing a little further. In 1984–85, Hackney borough, the most deprived borough in England, was allocated £11·4 million by the use of the E7 factor. The leaked document said that Hackney should have received £20 million. When the local authorities were finally consulted, that figure had become £16 million. Following further discussion, Hackney was allocated £7 million for 1985–86, but the council has finally ended up with £13 million.
Ministers continue to pretend that GRE is an objective and unbiased test of needs — a claim that is totally belied by the events that I have just described. They illustrate all the symptoms of political chicanery and political dishonesty at their worst. But it is on the basis of Government manipulation of those allegedly fair calculations that the iniquitous Rates Act is applied to override local democracy and accountability.
The report, and Government policy underpinning it, stands condemned by all national local authority associations. The Tory-controlled Association of County Councils has been bitterly critical of the report because of its impact on the shire counties. A few weeks ago—this was repeated to me in a letter that I received on Christmas Eve and mentioned again today—the Secretary of State said that the settlement shows that
I am, thanks to our rate limitation policies, now in a position to stop asking prudent authorities for real terms cuts to counter the excesses of the high spenders.
The fact is that 65 out of 77 metropolitan authorities, 11 out of 39 shire counties and 113 out of 296 district councils face real terms cuts in their grant as a result of the right hon. Gentleman's policies. He has consistently promised help to his shire county friends and said that the report fulfils his pledges and those given by the Under-Secretary of State, the hon. Member for Bristol, West (Mr. Waldegrave). In reality, 38 out of 39 shire counties have spending ceilings below their GRE—below what the Government say is our objective test of what they should spend. That is a worse situation than in the current


financial year. Things will he worse next year than this year. Sixteen shire counties suffer grant loss even if they spend at target as a result of the report. Essex will lose £19 million, Hampshire £15·5 million, Surrey £15·7 million, Hertfordshire £14 million and Berkshire, the very shire county that the Secretary of State chose to speak about in his statement in December—what we might call the Berkshire factor—will lose £10·4 million in grant if it spends at target next year. Oxfordshire will lose £10 million.
In his statement on 11 December, the Secretary of State mentioned Berkshire as an example of a county given favourable treatment. Now we know the result—a loss of grant of over £10 million next year for spending at target. The reality is that, in exchange for a minuscule increase in a target that is arbitrary anyway, a massive loss of cash results. As the ACC says, the 10 shires that benefit from the additional 0·125 per cent. increase in targets are allowed, in total, to spend an extra £2·7 million of their own money between them on total targets of £2·42 billion. That is a measure of the right hon. Gentleman's generous help to his friends. As a consequence of his decision, those same authorities will lose cash grant of £46 million in the process. That is how the Secretary of State has helped the shire counties. That is the true nature of the right hon. Gentleman's help, if it can be called that, to the shires; and it remains the case that lower spending authorities receive lower than average target increases in the report.
If in 1985–86 shire counties spend at their GRE, they will lose £1·5 billion in grant penalties under the present system. The right hon. Gentleman hinted at getting rid of targets and replacing them with GRE. That would be worse for the shire counties than the present situation, because they would catastrophically lose grant. That is a measure of the ferocity of the Government's policies.
The ACC and the Association of District Councils confirm, as has the Secretary of State for Education and Science, that the Rates Act, far from benefiting the shires, has greatly restricted their share of the total available increase in targets and their receipt of grant. The Rates Act does not help the shire counties—quite the reverse.
The ACC calls on the Government to recognise that Government policy has resulted directly in the equivalent of a 38p national rate increase since 1980–81 before any excess spending is allowed for. The ACC believes, as we do, that those policies lead to instability, incomprehension and a further loss of local accountability.
It is worth referring to some of the comments by shire county leaders in the Tory party. Councillor Roger Parker Jervis, for one, wrote to The Times and said:
Right across the country prudent Conservative councillors know their targets are unrealisable and ridiculous, and that to spend above them is inevitable if local services are not to break down or become the subject of derision. Thus penalties will, as in Buckinghamshire, increasingly fall heavily on the same hapless ratepayers for whom the Government claims to stand champion.
I am not willing to countenance such injustice.
The Tory leader of Oxfordshire, Councillor Eric Bond, predicted
a steep rate rise in the county next year".
Mr. Bond has called for a meeting with the Secretary of State to discuss the implications of the report. He made it clear that
Oxfordshire councillors had been stung be Mr. Jenkin's claim on Tuesday that 'our undertakings to the shires have been met to the letter'".

Going on to discuss the implications of the report, Councillor Bond said:
This contradicts Mr. Jenkin's claim that people will be delighted with the Government's attempts to control rates.
The Conservative leader of Oxford city council, Councillor Janet Todd, said:
Councillors are being made whipping boys for the defects of the rating system.
Even the chief constable of South Yorkshire, Mr. Peter Wright, has said that his police authority is caught in a vice between the Home Office and the Department of the Environment. One report says:
The Home Office always said that extra resources must be found from existing manpower and finance, said Mr. Wright. 'That is one side of the vice, and the other is provided by the Department of the Environment … Having gone through a recent budget trimming exercise, I know that any further cuts mean losses in manpower'.
That is the sort of thing that is being said about the rate support grant. I learnt today that even the Tories in Bradford are seeking legal advice about the implications of the report for them and their authority.
The Audit Commission, set up by the Conservative Government, has produced a damning indictment of Government policy towards local government finance. The report contains fundamental contradictions of all that the Secretary of State has been saying about the effect of Government policies on local councils. It demonstrates the futility of those policies. It demonstrates the futility of Government claims to be improving the efficiency of local government, with their systems of penalties and Whitehall interference. The Audit Commission's report makes it clear that rates in England are now higher than they would otherwise have needed to be, as a direct result of Government policy. The commission estimates that rates over the past three years have been higher than they need to be by some £1,200 million. Government-imposed targets are also shown to be confusing and based on inaccurate and inadequate information about the situation in our towns, cities and counties. Whitehall interference has undermined local accountability and management, and confused ratepayers.
That is what the Audit Commission says. Its report not only vindicates and substantially underlines what the Labour party and I have been saying about the ineptitude of Government policy, but makes it clear that Government policy is creating an appalling situation and making difficulties for local councils very much worse. That view is shared by every major local authority association, many professional bodies, the trade unions and the academic world.

Mr. Robert C. Brown: Does my hon. Friend agree that the policies of the Government are multiplying the problems in the inner cities? Does he agree that councils, such as Newcastle city council, have to spend more money on the problems of the inner cities, but the more inner city partnership money they spend, the nearer they are brought to being rate-capped? Is that not a monstrous injustice to the inner cities?

Dr. Cunningham: Yes, I agree with my hon. Friend. The reality is that the Government are in the ridiculous position of giving extra resources to partnership authorities with one hand and taking those resources away from them with the other.
The Secretary of State used to speak favourably about the Audit Commission. At a conference in Wembley last year, he said:


The Audit Commission has provided councillors with a powerful new weapon in their fight to keep costs down and so keep their rates down.
He went on to say that it would help them to improve their efficiency. However, when the first major report of the Audit Commission on the Government's own system of local government finance was published, the right hon. Gentleman changed his tune. He said:
The Government's immediate reaction to this Report is that whilst most of its recommendations seem reasonable, they are based on a number of wrong-headed arguments.
The Secretary of State is the only person who believes that to be the case.
The Secretary of State ignores all criticism, advice and evidence, and staggers on into the quagmire of his own creation. Promises and undertakings are cynically cast aside and all the arguments in favour of good local government and better and more efficient public services go unanswered. They are cast aside—throughout my speech the right hon. Gentleman has made a series of running sedentary interventions—rather in the way that the Under-Secretary was cast aside after his performance on the Rates Act in the House and in Committee. The behaviour of the right hon. Gentleman has been very nasty, if he does not mind me saying so.
Government policy is inconsistent, incoherent, incomprehensible and incompetent. In these matters—local services, education, housing, social services, transport — there is worse to come from this most criticised of Governments.
In these matters, too, the gulf between the Labour party view and Tory policies is vast and increasing. We are concerned to enhance local democracy. This Government destroy it. We are committed to better quality public services. This Government undermine them.
We condemn the report as mean, vindictive, biased and incompetent. It is typical of the gerrymander philosophy that the Government have expressed throughout their local government policy. I urge the House to reject it.

Mr. David Howell: There can be no doubt that the system of holdback, targets and block grant based on grant-related expenditure and grant-related poundage is one of the most miserable inheritances that any Secretary of State has ever had the ill fortune to receive. It has now reached a degree of complexity, as my right hon. Friend conceded today, which compares with the way in which the administration of the Austro-Hungarian empire was conducted, when it was said, hon. Members will remember, that items were put in an, endless series of pigeon holes and never recovered. It is in fact a machine without direction. I share the hope of my right hon. Friend that it should go as soon as may be and, indeed, the wish of others of my right hon. Friends that it should go as soon as possible.
I was never, I concede, a fan of the great complexity involved in the system and I must confess to my right hon. and hon. Friends on the Front Bench that I am not totally uninfluenced in my renewed views about this by the fact that the borough of Guildford has received news of a 73 per cent. cut in its grant in 1985–86. This tends slightly to colour my views. I understand that this is called "a search for overall fairness", but it is a little difficult to see exactly how that fairness works out. There is also the difficulty

that this news has been received two months before the rate is made by the borough. I know it has been a continual difficulty over the years that the basic arithmetic on which local authorities, both district councils and county councils, have to plan tends to get dumped on them impossibly close to their major decisions on planning their expenditures on services and, indeed, their longer-term projects.
This brings me to the substantial point that I wish to make, and which I think my right hon. Friends have already accepted—namely, that we simply must handle these issues in future in a more strategic, systematic and long-term way to make any kind of sensible economising and to make the drive for higher efficiency sustained and sustainable.
It is perfectly true—this must fairly be conceded to my right hon. Friend—that his undertaking that the target situation for the low-spending authorities will be improved has been met. If I may refer again without apology to my own borough of Guildford, the target of what it may spend of money raised in one way or another has substantially increased. For the coming year, I think that it is something approaching 6 per cent. However, what has not increased, but, as I have already said, gone dramatically the other way, is the grant. It has been cut by 73 per cent., and that announcement reached the borough council about which I am speaking two months before it has to make a rate.
I say to my right hon. Friend — here I depart strongly from the histrionics that we have heard from the hon. Member for Copeland (Dr. Cunningham) and the general view of the Labour party—that I am not against a strategy of reducing the central Government taxpayer support for local government spending. I think that that is a worthy strategy. I can never really understand the modern Labour party's view that more and more taxes should be taken from often very low income taxpayers and families in straitened circumstances to finance substantial expenditure by local authorities, which does not necessarily go the poorest people of all. This is a sort of mad redistribution in reverse of the kind that only the unthinking group of people which the Labour party today is comprised of, could possibly espouse. If it is to be the pattern—I believe that it is right—that we reduce the grant support element to local authorities over the years, it must be done in line with a strategy. It is virtually impossible if it is done by the sort of hiccups and sudden moves that have been operated in recent years.
Why has this difficulty arisen? Again the mechanics are obvious. Each year a terrific fight takes place in Whitehall, and people are so exhausted by the settlement this year that it is in the interests of no party to go on and try to work out a settlement for next year. The Treasury does not want to settle it because it hopes that it might get a still tougher settlement, and the spending and sponsoring departments, the local authorities, do not want to come immediately to a conclusion because they hope, always with fingers crossed, that there will be some better prospects for next year.
Thus, there is no strategy and no one has been able to say over the years to the local authorities—particularly those which seek to economise and co-operate and to be, in the words used by the Minister for Local Government to describe Guildford borough council — a model authority—"Over three, four, or five years the grant


element will be reduced by so much and you can plan accordingly." Therefore, they have not been able to plan and have been thrown into these great difficulties.
Behind this lies a much bigger question, of which my hon. and right hon. Friends on the Front Bench are well aware. There is no strategy for reducing grant year on year, because there is no strategy yet established of what that grant should be for, what the source of finances should be for local authority functions, and, indeed, what the pattern of local authority functions itself should be.
The Committees and groups that have been formed by the Department of the Environment will have to address themselves to that aspect and make some radical decisions if, as I passionately believe, the amount of taxpayers' money going from central Government to local authorities is to be radically reduced and the independence of local authorities increased in the way that I and many Conservatives wish. If that is the aim, we need a major re-examination of the vast range of functions now financed by local government and inevitably requiring huge injections of central Government funds.

Mr. Laurie Pavitt: The hon. Gentleman's generalisations seem to ignore the fact that ratepayers are also taxpayers, and vice versa. Moreover, he seems to assume that all taxpayers are poor and all ratepayers are rich. In my area the reverse is usually the case.

Mr. Howell: I am making no such assumption. I am simply seeking greater independence for local authorities. I am sure that the whole House will agree that a great deal of the difficulty and bad blood under successive Governments has arisen because of the transfer of taxpayers' money from central Government through the processes of local government into a certain range of functions. I do not expect this to be generally agreed, as I do not believe that public policy makers have yet thought the matter through, but I believe that we shall have to face the question of the largest consumer of local government funds handled through local authorities—education. If teachers' salaries were centrally funded, we might at last begin to move towards the stage at which rate support grant was no longer needed — except for a certain equalisation across the country, the admitted complexities of which are as nothing compared with the vast difficulties and visible injustices of the present system.
The difficulty for Ministers at present is that they are under pressure from the Treasury to reduce the rate support grant each year—from 51 to 48 per cent, and so on down—but the reallocation of functions which would allow a really radical reduction is not yet in place. That vital part of the strategy is not yet established because the breakthrough in thinking has not yet occurred to enable major reform of the range of functions that local authorities are allowed to conduct. When that takes place we shall begin to return to the independence of local government, with local activities financed from the rates, with a certain amount of equalisation grant for areas in greatest need, which was always the intention in earlier days and from which we have departed.
Until that basic difficulty is solved we shall remain in the quagmire of complexities in which Ministers currently have to struggle amid great difficulties, making very little progress and facing a storm of criticism at every turn. The latest attempt to achieve the "overall fairness" to which I

rather cynically referred earlier takes the form of a new type of grant-related expenditure calculation, with some very bizarre elements.
A great deal of this seems to relate to the amount of money that local authorities are allowed to spend on leisure facilities. If I have this wrong, I hope that I shall be corrected, and I shall value any comment on this aspect. The new arrangements appear to mean that the greater the charges imposed by local authorities for entry to leisure facilities such as parks and swimming pools, the less grant they will receive, but the less grant they receive, the more they will of course have to charge for entry to those facilities. That merely adds to the great complexities already inherent in the system.
I shall not detain the House further on that aspect, as I believe that we have now all realised that that is the fundamental problem. Until we get the question of functions straight, we shall not get the finances straight.
There is, however, an additional factor, which we debated before Christmas — what local authorities are allowed to do with capital receipts. Here, too, much more fundamental reforms are required. In this context, the right hon. Member for South Down (Mr. Powell), who is not in the Chamber, in one of his fascinating speeches suggested that the Government were wrong to seek to control expenditure of capital receipts, which belonged not to the authorities but to the ratepayers—it is easy to fall into collectivist language and imply that the institutions own the funds—but should instead examine the control and administration of local authority borrowing. He went on to say, amid cheers from the Opposition—erroneous, in my view, as I do not believe that they fully understood the right hon. Gentleman's point — that if local authorities had full control of their capital receipts, but had to raise loans on their own security rather than on the credit and security of central Government, that would be a logical and rational approach to increase the independence of local government.
I do not think that I have distorted the right hon. Gentleman's point. I am sure that many of the authorities now moaning for more access to capital receipts to supplement their budgets do not for one moment envisage having to raise loans and borrow on their own security, and many of them would have great difficulty in doing so.

Mr. Patrick Jenkin: I, too, heard the comments of the right hon. Member for South Down (Mr. Powell), but I do not entirely follow the point that my right hon. Friend the Member for Guildford (Mr. Howell) is making. It is important to put it on record that local authority borrowing is not guaranteed by the Government. I think that that has become more widely known in recent months as some authorities faced with rate-capping have threatened not to pay their debts. That being so, I am not sure that the right hon. Gentleman's point had quite the force that my right hon. Friend suggests.

Mr. Howell: I am interested to know that. If local authorities borrow on their own security and not on that of central Government, that is a desirable state of affairs which should lead to greater independence of local authorities without their activities constantly undermining the Government's economic and financial strategy, which has been a constant difficulty in the past. The question of capital receipts is very much part of the jigsaw and requires further reforms and improvements.
I end this somewhat one-tracked contribution by repeating what I said at the beginning. We shall have no peace, no clear basis and no feeling of fairness among local authorities, even the low spenders, until we have clearly established what their functions should be and how the rate support grant can fairly be reduced in line with the reduction in the functions on which local authorities are required to spend money.

Mr. Norman Atkinson: I wish to comment briefly on some of the conclusions reached by the right hon. Member for Guildford (Mr. Howell). The policy of non-payment of debt to which he referred was reached collectively by the authorities concerned when they were thinking of pursuing a policy of non-compliance with the Government's wishes. That has now changed considerably. No doubt, as the debate develops, we shall hear what is the current position on how those authorities can best seek to defend their services and employment responsibilities.
I agree with the right hon. Member for Guildford that the whole miserable system should go and I believe that majority opinion favours that. The curious thing is that the Government have lived with it for five years. Despite their constant references to the inherent injustice of the system, they have merely added to the injustice and are now making it even worse. As the right hon. Gentleman said, the Government's proposals are bizarre—even when one considers the major influences that have driven the Secretary of State to make his decisions and to reduce the aggregates in the way that he has done.
Someone receiving a meal from the meals-on-wheels service would find it incomprehensible if he were told by the person delivering the meal that the reason for his saying, "I am sorry, love, but there is no meat today," was that to all intents and purposes, Britain now had an oil economy and an oil currency, that there had been a row in the Gulf, or a run on the pound, and that the interest rates were worrying the Treasury. Decisions about the quality of local authority services are dictated by external events in no way related to this country's attempts to maintain a welfare system which recognises the priorities to which Conservative Members continually refer.
I want to consider the difficulties created for the London borough of Haringey by Government policy, and the difficulties with which it will have to contend in attempting to protect the local people. The Secretary of State has now taken on the role of sequestrator. Philosophically, he is using the same methods and mechanism as the sequestrators who are tackling the trade unions. In relation to authorities such as Haringey, his functions seem to be identical to theirs.
The right hon. Gentleman was once a member of the borough council of a constituent part of Haringey, and was at one time, I believe, the chairman of finance.

Mr. Patrick Jenkin: Housing.

Mr. Atkinson: I thought that the right hon. Gentleman had been the guru in charge of Hornsey finance. The right hon. Gentleman is familiar with some of the problems of the borough, and I am amazed that he can gloss over so easily the difficulties that now beset Haringey as a normal London borough.
First, there is the formula which the right hon. Gentleman has used in setting targets and in deciding the amount of grant. We hear constant references to the local authorities' spending ceilings and general expenditure limits. As I understand it, the right hon. Gentleman will not legally enforce any expenditure limit except for the purpose of imposing penalties. If a local authority wishes to spend above its target, or above the spending ceiling to which the Department refers, the right hon. Gentleman will not prevent it from doing so as long as the money is not drawn from rate revenue. If the money is found from other resources controlled by the authority—from any savings which the authority may have made—it may use such resources to enable it to spend more than its ceiling in order to maintain services. I take it that the right hon. Gentleman's silence means that I am right and that there is no such thing as a legal ceiling on local authority expenditure.

Mr. Patrick Jenkin: What the hon. Gentleman says is broadly correct. The expenditure level of which we gave notice last July was intended to make clear the basis of the rate limit that I announced in December. It is the rate limit which the House will shortly be invited to confirm, and which will be the legal limit. If Haringey or any other authority has other funds tucked away which it wishes to spend in order to maintain a higher level of spending, it will be free to do so. That will be its choice. The rate limit is designed to potect the ratepayers. It is an upper limit on the amount that an authority can raise from the ratepayers.

Mr. Atkinson: That is a most important statement. It clarifies the Minister's thinking. He is concerned about extracting more penalties out of savings, as he will do if the authorities exceed their ceilings. The penalties inflicted under the present ceiling arrangement will increase the right hon. Gentleman's revenue.
Haringey now has no savings and depends entirely upon the money that it receives from rate revenue. In fixing the maximum amount to be collected in rates the Secretary of State ignores the fact the last year Haringey spent the money that it saved. In rate-capping Haringey at a certain level, the Secretary of State has ignored totally the fact that Haringey had to spend all its savings last year in order to stand still. That has created serious problems for the authority.

Mr. Patrick Jenkin: This is an important point. If Haringey believes that because we have not taken account of the state of the borough's reserves the rate limit that we have set requires of it greater savings than we have estimated, the legislation provides the remedy. However, the borough must get a move on, because I shall very soon have to confirm the limit and lay the order. The borough has a remedy. It may ask for the limit to be raised. I have said so again and again. If it refuses to do so, it must be satisfied with the limit that I fix.

Mr. Atkinson: It is not too late for all the rate-capped authorities to talk to the Secretary of State about such problems.

Mr. Patrick Jenkin: Where are they?

Mr. Atkinson: There is every chance that they are on their way to talk to the right hon. Gentleman about their problems. The implied unemployment is now becoming a


real factor, as is the unfairness that arises where there is a difference of millions of pounds between the savings of one authority and those of another.
The right hon. Gentleman referred to the statement that he made on 24 July. He has also said that there would be only a minimum reduction on the amount that Haringey was to be allowed to collect via the rates. But that is not so. According to the right hon. Gentleman's figures, Haringey must cut its expenditure by nearly 14 per cent., rather than the 3·5 per cent, which the right hon. Gentleman mentioned on 24 July and subsequently. Because, last year, in order to maintain its services and its employment levels, Haringey had to dip into its savings and clear out the cupboard, the borough is now being heavily penalised by the massive reduction being imposed by the Minister. This is an astounding situation and is contrary to everything that the right hon. Gentleman has said.
According to the figures now produced by the right hon. Gentleman, Haringey will receive a total grant of £20·8 million. That is an amazing reduction from 1979–80, when the Government funded 56 per cent, of total expenditure in the borough. The grant has been reduced from 56 per cent, of permitted expenditure to 14 per cent, of budgeted expenditure for next year. The Secretary of State is suggesting that Haringey should restrict its expenditure to £128 million next year, but Haringey says that merely to provide the same services as were provided last year it will need £148 million.
Of the £148 million, the grant is worth only £20·8 million. That is an astounding reduction. It is not a wild exaggeration to say that that is punitive for the people whom Haringey is trying to protect — the most vulnerable. It is one of the most heavily populated areas of London and suffers some of the most severe social deprivation. We have 16 per cent, unemployment—the level is still higher at my end of the borough. Nevertheless, the Government are insisting on reductions in Haringey's expenditure. That will result in massive job losses in the authority. The Government's figures suggest that between 2,100 and 2,300 employees will have to leave.
The block grant system is also grossly unfair because the formula for grant-related expenditure means that there is a maximum variation of only 4·5 per cent, between good and bad authorities in terms of social conditions, not expenditure. That is astounding. Haringey is dealt with exactly like Doncaster and Wakefield, although the unit cost of providing services in such Yorkshire authorities is far lower than in Haringey—far less than 4·5 per cent. The figures that the House is considering show that the differences that affect allocations are insufficiently taken into account.

Mr. Michael Shersby: I have listened to the hon. Gentleman's argument carefully. What is the population of the London borough of Haringey?

Mr. Atkinson: It is 201,000. Although I understand that the number has come down recently, it is comparable with the areas to which I have referred. The variants that are built into the numbers are insufficient.

Mr. Pavitt: Much of what my hon. Friend has said applies to the London borough of Brent, which has a population of 250,000. Ethnic changes have had a substantial impact. Half of the population being from ethnic minorities requires many differences in rate support

considerations to enable us to have a multiracial community. Does he agree that such considerations seem to be missing from the documents before us?

Mr. Atkinson: My hon. Friend is right. The problem is not that the differences are not recognised, but that the variants are insufficient to take account of those social differences.
We should register our dissatisfaction, from a London point of view, with a system that does not take care of our needs. Government grant represents just 14 per cent, of Haringey's budgeted expenditure. Haringey has mandatory commitments involving between £58 million and £61 million. The Secretary of State might shake his head and say that that is irrelevant, but it is an important consideration. When total Government grant is only £20 million and mandatory commitments involve about £60 million, it is clear that if we are to achieve the savings on which the Secretary of State insists—from £148 million to £128 million — the majority must come from job losses. The Secretary of State is coolly telling the House that the great bulk of the savings will come from pushing people on to the dole queue. That does not seem to worry him. No doubt he thinks that some other Secretary of State for the Environment will pick up the tab and that, in the meantime, such savings will solve his problem. The social consequences of such action are enormous in areas such as mine. That part of the argument seems to have been glossed over.
There are many ways in which savings can be made. I do not claim that everything that the public sector does is the epitome of efficiency. There are many criticisms —we all know what they are—but most local authority money is spent sensibly. All of those whom local authorities employ are accountable and contribute to social welfare in the authority's area. If, because of mandatory commitments, so much of the money that must be saved has to come from job losses, the Secretary of State is saying that Haringey must reduce its work force by about 2,000 to 2,300.
That is an enormous cut. The Secretary of State has said that he does not think it possible to cut by more than 5 per cent, in one year, yet here he is demanding a cut of 14 per cent.—nearly three times what he believes is attainable. That is what he is imposing upon an authority that is driven almost spare by the pressures upon it. If that is not upside-down leadership, I do not know what is.
From now on there can only be misery — cuts in services, in jobs and everything else that the Haringey authority provides. Who will benefit? Certainly the people of Haringey will not, nor will the Government. If we consider the aggregate, the Government will be the loser, because it will cost more to get rid of those people than to increase grant support.
We have four requests. There should be a removal of holdback. Secondly, the 1984–85 slope should be retained. The Minister has said with a great deal of pride that he has increased the slope. That is damaging for inner London authorities, because, as the slope is increased, so things will become increasingly difficult. Thirdly, the GREAs should be improved in line with the recommendations of the Association of London Authorities. Fourthly, grant percentage should be restored.
London authorities, particularly those like Haringey, do not want increases in expenditure limits or matters like that to be discussed. What they want is money. They want


more from the Secretary of State than he is proposing to give them. That is where the damage is being done. Surely he does not want to go down in history as the person who cut Haringey's services and denied so many people not just the inheritance that he has talked about in welfare services but their jobs. He will be the biggest butcher of jobs of all time in Haringey if this policy is pursued. Let us hope that it is not too late for him to give hope to people in Haringey by revising the figures.

Mr. Michael Shersby: For the past seven months or so I have spent much time discussing the effect of the rate support grant settlement on the London borough of Hillingdon, in which my constituency is situated, and upon the domestic and business ratepayers. During that period I have attended numerous meetings with the leader of the council and his colleagues and I have made the strongest possible representations to my right hon. Friend the Secretary of State and the Minister for Local Government about the way in which the block grant system is operating most unfairly against prudent Conservative-controlled local authorities, particularly in outer London.
The reason for all the activity in which I have been engaged, together with my hon. Friends the Members for Ruislip-Northwood (Mr. Wilkinson) and for Hayes and Harlington (Mr. Dicks), is that by last summer the leader of the council and his colleagues were keenly aware that, unless the calculations upon which the grant is distributed took account of their excellent performance since they came to office some six years ago, it seemed certain that the grant would be too small, the target out of reach and the penalty in terms of grant loss such as to result in a rate increase of over 40 per cent, or massive reductions in public expenditure to maintain existing services at their present level.
The House, and particularly my hon. Friends, will agree that this is serious for a good Conservative-controlled authority which has already reduced expenditure considerably over some six years. It is extremely depressing for the hard-working councillors who have carried out Conservative policy and for the ratepayers who are concerned about what is happening. They are particularly concerned because Hillingdon has, for the past six years or so, delivered an annual rate increase which has been little, if any, more than the rate of inflation. That is a very good record which is appreciated by the business community. In other words, both the domestic and the business ratepayers in Hillingdon have had a good deal from their council and they expressed their confidence in that council at the last election by providing the Conservative party with a substantial majority to continue its policies. One of the key elements of those policies is the control of public expenditure, which has substantial support within my borough, as has been made known to me by residents' associations, business men and many others.
What is the problem that faces Hillingdon and a number of authorities which, like Hillingdon, are not rate-capped? To answer the question it is necessary to examine the grant-related expenditure assessment. Since the 1981–82 First Supplementary Report which set GREA for England at £17·2 billion there has been an increase of 23·4 percent.
in the settlement to £21·22 billion for 1985–86. The GREA for outer London boroughs in the same period has increased by 17·4 per cent, to £1·71 billion. The Hillingdon GREA has increased from £71·7 million by 16·2 per cent, to £83·3 million. That means that outer London has received an increase in GREA which is less than three quarters of the national increase for England as a whole, but Hillingdon has been treated to an even lower increase. Why?
One explanation which has some validity is that Hillingdon provides certain services which were introduced by the previous Labour-controlled council which was in office for some years and which was succeeded by the present council in 1978. Those services relate mainly to education and social services. It has been suggested by some of my colleagues that perhaps we are spending too much on, for example, adult education, the rising-fives programme and nursery education.
If my right hon. Friend feels that we are spending too much on those services, I cannot do better than to draw his attention to the remarks of my right "hon. Friend the Prime Minister in the House on 19 February 1973 when, as Secretary of State for Education and Science, she was introducing the White Paper entitled "A Framework for Expansion". She said:
Dealing with nursery education, the first major proposal in the White Paper was that within 10 years nursery education should become available without charge to children of three or four whose parents wished them to have it." — [Official Report, 19 February 1973; Vol. 851, c. 42.]
Hillingdon implemented that policy. Many people in my constituency find nursery education to be a great advantage, and I share their view.
In regard to social services, we have 12 old people's homes, we provide a subsidised meals-on-wheels and home-help service, and we pay special attention to the needs of the mentally and physically handicapped. I am sure that my right hon. Friend will recognise that if Hillingdon did not provide those services to that extent it would probably not exceed its GREA. If Hillingdon and other authorities are being told to change their expenditure on such services, at least it would be sensible to provide notice and some material help to achieve that objective.
Let us consider the block grant. The first calculation for the 1981–82 financial year was £29·9 million for Hillingdon. The computation for 1985–86 is £17·9 million — a reduction of 40 per cent. I stress that the 40 per cent, reduction has nothing to do with the borough council's spending plans. However, it has a great deal to do with the distributive mechanism for block grant. The reduction for 1985–86 brings the safety-netting process into operation to protect Hillingdon against loss of grant. Hillingdon is not alone. For example, nearly one half of the 146 non-metropolitan districts are in the same position.
Hillingdon is, however, in that select group of eight authorities—with Cumbria and Durham county councils, Chester-le-Street and Forest Heath non-metropolitan district councils, Salford metropolitan district council, Tower Hamlets and Richmond upon Thames London borough councils—which have been safety-net protected against grant loss for each of the five settlements between 1981–82 and 1985–86. Is that not curious? Does my right hon. Friend agree that to require safety-net protection in each of the five settlements suggests that something


fundamental is wrong with the figures that he has set for each of those authorities from the outset of the block grant system?
Surely my right hon. Friend must accept that the order has to apply safety-net protection against grant loss for 161 authorities — approximately 40 per cent, of local authorities in England—which is more than the previous highest number of 142 in 1982–83. That demonstrates beyond argument the instability and manifest unfairness of the system which prevents the proper forward planning of services which Parliament has authorised, and, indeed, encouraged the authorities to provide.

Mr. Patrick Jenkin: I am listening carefully to my hon. Friend's case. As I said in my speech, this year we made more adjustments in the GREAs to take account of representations by local authorities and local authority associations about unfairnesses that existed before. We have recognised them and made changes. Of course, as my hon. Friend says, the safety-net procedure exists to minimise the impact on local authorities which lose grant. I should have thought that my hon. Friend would have recognised that the safety-net procedure is designed to protect authorities such as his from what might have been a greater impact as a result of changes in GREAs.

Mr. Shersby: I do not question the safety-net provision. It is there to avoid excessive losses caused by changes in grant methodology. However, I question the efficacy of a system that necessitates such protection for a large number of local authorities. The system is far from perfect.
Let us consider the effect that this unjust system has upon my constituency. The continuing reduction in base grant, the 15 per cent, increase in grant-related poundage slope and the swingeing effects of the massive increase in penalty—up 250 per cent, from 2p to 7p for 1 per cent. over target—will require the council to slash its services if it is to continue with its previous record, which I have been proud to support, of containing rate rises to the level of inflation, in spite of the adverse effect of excessive grant settlements.
The decision about what action to take rests with the Hillingdon councillors alone. Let me make the options clear to the House. They are a rate rise of over 40 percent, or service reductions of 15 per cent., equivalent to £11 million, to produce, say, a 5 per cent, increase in line with inflation. They are the two extremes facing local councillors. I do not envy them their task of having to find an acceptable solution. I hope that they will find a compromise somewhere between the two extremes.
I remind my right hon. Friend that I am speaking about an authority which, according to the 1984–85 Audit Commission profile, spent £27, or 6 per cent., per head less than the outer London local government family average. Even after the disastrous effects of grant which pushed rateborne expenditure to £71 or 30 per cent, above that local government family average, it still managed to levy a rate in 1984–85 below that local government family average.
Why, after all the representations by my colleagues and myself, do the Government intend through the rate support grant system to mete out such treatment to a borough such as Hillingdon? Why should I be expected to support a settlement which, at the same time as having a devastating effect on my local authority, can increase the entitlement

of one of its rate-capped neighbours by 11 per cent.? I am sorry that the hon. Member for Brent, South (Mr. Pavitt) is no longer in his place, because I am sure that those figures would be of particular interest to him.
I must tell my right hon. Friend that I cannot and will not any longer support a settlement which is so manifestly unjust and which cannot operate with sufficient sensitivity as to take into account the success and achievement of my local authority which is of such a high order that it was described by one of his predecessors in office as one of the blue chip authorities.
I am most grateful to my right hon. Friend and the Minister for Local Government for their constant courtesy and willingness to meet me, councillors and local business men to consider Hillingdon's plight, but I cannot accept that my right hon. Friend has been able to make any real impression on the rigidity and inflexibility of a system which cannot and should not continue.
My right hon. Friend has said today that he hopes in due course to bring forward some proposals for change. I hope that they will be significant and that he can make some meaningful changes for next year.
I have to ask myself what is my duty to my constituents tonight. I am clear that it is to express in no uncertain terms to my right hon. Friend and his colleagues my constituents' grave concern about his inability to meet the reasonable expectations of one of the best local authorities in Britain. I very much regret, therefore, that I shall not be able to support the motion to approve the report.

Mr. John Cartwright: This is the fifth rate support grant settlement since the Government started to try to control local authority spending under the Local Government, Planning and Land Act 1980. It must take the doubtful prize of being the most complicated settlement yet. It has been made more complicated because it is the first settlement under the new rate-capping regime set up by the Rates Act 1984.
The Secretary of State accepts that the complexity of the settlement makes it almost impossible for anyone to understand it. That must undermine the accountability that is so vital to local government. In the past Ministers have argued that complexity is necessary to achieve accuracy in assessments, but Ministers frequently tell us that grant-related expenditure settlements involve a broad brush approach and a rough approximation.
In fact, we have the worst of both worlds — a complex system based on somewhat dubious assessments. Ultimately, that must become self-defeating. If GREAs cannot be understood, changes in grant cannot be understood. That makes it impossible to explain to ratepayers why their rates vary, which makes the defence of local accountability very much more difficult to mount.
The other major feature that has become all too obvious about this settlement is that the Secretary of State has achieved the dubious distinction of having upset virtually everybody. The metropolitan authorities are unhappy because they are being asked to make real cuts in spending when the majority of the shire authorities are not. The shire authorities are equally unhappy because extra block grant and extra leeway in targets have gone to the so-called overspending rate-capped authorities and not to the more prudent ones.
The Association of Metropolitan Authorities has argued that, on the basis of the Government's inflation figures,


real cuts in spending are being asked of 65 metropolitan authorities, which is 85 per cent, of the total. In the non-metropolitan areas, real cuts are being sought from only 11 counties, which is 28 per cent, of the total, and from 113 districts, which is 38 per cent, of the total. Not only are the targets generally unfavourable to metropolitan authorities, but the revisions to the target methodology have not helped. Of those authorities that have had their targets increased, only 13 out of 213 are metropolitan authorities. That is the case for the metropolitan areas.
The Association of County Councils argues that the 18 authorities due to be rate-capped have target increases of nearly 21 per cent, and that those authorities alone have taken up 43 per cent, of the total increase in targets available. In a judgment that cannot be very good news for the Secretary of State, the Conservative-controlled Association of County Councils states:
The introduction of rate-capping, far from benefiting lower spending authorities, has very greatly restricted their share of the total available increase in targets.
That, of course, is not the prospect that was offered by Ministers when they were seeking to encourage their Back-Bench supporters to go through the Lobby in favour of rate-capping, but that is what has become all too clear in this settlement.
As we have heard in the debate already, some of the loudest screams of pain and bewilderment have come from those authorities which have actually done what the Government asked them to do—cut their spending and kept to their targets. As a result they do not find that they are being rewarded in any major way by the Government. The concession that has been granted to the lowest spending authorities is minimal. Those who try to follow what the Government dictate are still being penalised.
My hon. Friend the Member for Portsmouth, South (Mr. Hancock) intervened in the Secretary of State's speech to point to the problems being experienced by the Hampshire county council. Its chief executive said that he regards the concessions being given to authorities such as his as only minimal. He said:
The gap between the target and the Government's own assessment of Hampshire's needs as reflected in the Grant Related Expenditure Assessment is widening and now stands at £29 million. If the County Council were to spend up to the level of assessed need it would incur penalties of £94 million involving a rate precept increase of a further 40 per cent. So far as Hampshire is concerned the purpose of GREA appears to have been lost.
That loyal Conservative authority clearly feels that it has not been given a proper reward for having stuck so closely to the Government's guidelines.
The same pattern has been clear in London, as the hon. Member for Uxbridge (Mr. Shersby) made clear. The Tory-controlled London Boroughs Association points to the fact that all of its 24 authorities budgeted within 5 per cent, of their target for 1984–85. All but two of them were within 2 per cent, of their targets and 10 were actually at or below targets. Yet in 1985–86 those councils—with the exception of Westminster—will be required to make real cuts ranging from 0·7 per cent, in Kensington and Chelsea and the City to 5·9 per cent, in Hounslow.
The London Boroughs Association, with commendable loyalty to the Government, said that it hoped that its member authorities would endeavour to meet their targets.
However, it pointed out that that would be a difficult task, especially in view of the stringent economy that most of the boroughs had exercised for many years.
The system is clearly rigged to keep low-spending authorities as low-spending authorities. Back in what appears to be the almost halcyon days of 1983–84, a 1 per cent, overspend resulted in a loss of grant equivalent to a 1p rate. In 1985–86, a 1 percent, overspend means the loss of grant equivalent to a 7p rate. It is, therefore, very much more difficult, both politically and financially, to raise spending levels. The new draconian system means that lower-spending authorities suffer most from penalties in relative terms.
The Association of County Councils has pointed out that if its members has overspent their targets in 1984–85 by an average of 1 per cent, the penalty grant loss would have been £68 million. If the same overspend were to take place in 1985–86, the penalty grant loss would be £240 million—an increase of more than 250 per cent. That shows the way in which the small overspenders will be substantially penalised in the settlement before the House.
Together with hon. Members from both sides of the House, I believe that that underlines once again the inadequacy and unacceptability of the whole complex system of targets and GREAs. The whole system is failing to make sense. GREA was originally introduced as an independent measure of what an authority needed to spend to produce a standard level of service. As other hon. Members have said, many authorities have budgets fixed well below the GREA level and are forced to keep them that low by Government targets and by the punitive system of penalties.
We have already heard that three shire counties— Berkshire, East Sussex and West Sussex-would lose all their block grant in penalties if they spent to the GREA level — the level which the Government suggest they need to spend to provide an acceptable level of service. Another four counties — Buckinghamshire, Dorset, Norfolk and Surrey—would lose 85 per cent, of their grant if they spent to GREA level. That undermines the whole case that has been presented during the past five years, that GREA is a useful objective assessment.
I wish briefly to deal with rate capping. I remain convinced that it is an unacceptable interference in the affairs of local government. It is obviously interference in the affairs of the rate-capped authorities. It is now becoming all too clear that it also interferes in the affairs of the non-rate-capped authorities, because they are losing grant which they might otherwise have had if it had not been diverted to the rate-capped authorities.
The effects of rate capping are clearly much greater than the Government originally thought. That results from the distortions that are produced by the whole system of targets and penalties. In earlier years a number of the rate-capped authorities understated their budgets to qualify for more grant, which now has an impact on their expenditure limits.
The expenditure limits which the Secretary of State announced on 24 July did not, at first sight, appear unreasonable. He was asking for a cash freeze in 15 authorities and a 1·5 per cent, cash reduction in the GLC, the ILEA and my borough of Greenwich. Closer analysis shows that the expenditure limits were much tougher than that. The Secretary of State has taken a very narrow view of expenditure in 1984–85. He has chosen to ignore expenditure being financed from special funds and a


variety of other what are now called creative accounting devices which councils have been forced to adopt to minimise grant penalties. The effect of that was to turn what was claimed to be a cash freeze into an average real cut of 11·9 per cent, for the rate-capped authorities. Individual councils face real cuts of between 6 and 28 per cent, to get down to the expenditure limits.
The Government on the one hand, and rate-capped councils on the other, are taking part in a damaging game of political brinkmanship, and what is at stake is the quality of services provided to local people. I fear that the local people will be the losers in this battle. Rate-capped councils should stop their political posturing and negotiate with the Secretary of State. Meanwhile, the right hon. Gentleman should be as flexible as possible to correct what are clear errors in the original expenditure limits that he fixed. We should accept that this is not a private fight between Conservative Ministers and Labour councillors. We are talking about extremely important services on which many of our constituents depend.

Mr. Tony Banks: Is the hon. Gentleman aware that, by their actions, the Government have turned this into a party political fight? The decisions now being made by Ministers are based, not on a rational assessment of need, but on party political spite. What other response does the hon. Gentleman expect Labour-controlled authorities to give?

Mr. Cartwright: If the rate-capped authorities have a good case—I do not accept it in its entirety, though I accept it to the extent of believing that the expenditure limits imposed by the Government are sometimes based on faulty information—I cannot understand why it should not be argued with all the power at their disposal before the Secretary of State. That is what councillors were elected to do, but they fail in their duty if they simply sit on the sidelines trying to extract political benefit from the brinkmanship that is now going on.
We have in Britain a rating system that is unloved and unreformed. Not only are rates an inappropriate tax to carry the heavy burden that is placed on them, but rateable values are wildly out of date and the Government have not fulfilled their promise on revaluation. In the White paper, entitled "Rates", Cmnd. 9008, of August 1983, the Government said about non-domestic rates:
Significant changes have occurred in the relative values of some categories of property since the 1973 revaluation.
The Government accepted that that had
distorted the tax base. As a result, rate bills for some categories of property are much higher or much lower than they ought to be. In particular, the relative rental values of large, old buildings, occupied by labour-intensive industries, many of them in the Midlands and the North, have in general declined substantially since 1973.
The Government also said:
These distortions should be rectified. The Government propose to set in train the work required for a non-domestic revaluation.
Referring to domestic values, the White Paper said:
The Government are considering urgently the case for a domestic revaluation and will issue a consultation document as soon as possible.
Those clear commitments were given 18 months ago, but we have seen no indication of what will be done as a matter of urgency to deal with the distortions in the system of rateable values.
I agree with hon. Members who argue that changes are needed in the system of local government finance, but we

need a more radical change than some have in mind. There is no lack of evidence on and results of research into the problem. It is more than eight years since the Layfield committee presented its report based on two years of detailed expert work. The Government undertook their own consultation exercise in the last Parliament. Yet now we are promised another series of inquiries and studies into the whole problem of local government finance.
We need no more research and study, but the political will to change the system. We must accept that there is no ideal system, one that is proof against every possible criticism. I remain convinced that Layfield was right when it recommended that the only way forward was the introduction of a system of local income tax to replace or supplement the system of rating. The computerisation of the Revenue has made that a more practical proposition than it was in 1976. The sooner we get on with the job, the better for the ratepayers and the health of local government in Britain.

Mr. Churchill: I agree with the hon. Member for Woolwich (Mr. Cartwright) that low-spending authorities are boxed in should they seek to increase their expenditure.
I have great sympathy with the Secretary of State. Those, if there be any, who would present him with bouquets are significantly absent from the Chamber, whereas those who wish to belabour him with brickbats are here in force, and I regret to tell him that I find myself in that latter category.
Last year the Secretary of State undertook to assist low-spending authorities. Much has been said about the plight of the shire counties, but not only those counties are suffering. As the representative of part of the metropolitan borough of Trafford in Greater Manchester, I assure my right hon. Friend that we suffer the same problems with a vengeance.
The Secretary of State claimed to have honoured his pledge, given last year, to assist the low-spending authorities on the basis of the 4·625 percent, increase. In consequence of that increase, Trafford has benefited to the extent of £267,000 in the current settlement but, regrettably, because Trafford is labelled a high-resource authority it will lose £56,000 of that in grant if it spends the extra money, for we suffer from what is known in my right hon. Friend's department as a negative marginal rate of grant. As a result, we lose 21p in every pound. While, therefore, I am sure it was not my right hon. Friend's intention to mislead the House, his opening remarks today were not accurate in the case of Trafford borough council.
Thus, while the net benefit from this special dispensation for low-spenders is barely £200,000. in almost the next breath my right hon. Friend is again removing £2 million in grant from Trafford. Our grant is being cut from £20·5 million this year to £18·5 million next year, and we have recently been informed that we have lost a further £1·05 million on notifications of adjustments on previous years.

Mr. Straw: The hon. Gentleman says that his authority's grant has been reduced from £20·5 million to £18·5 million. Does he appreciate that that grant this year would have been only £18·5 million but for the fact that his authority was given grant that was taken away from so-called overspending local authorities? In other words, his


borough is the classic example of a lower-spending Conservative authority benefiting through the grant system from alleged overspending by Labour authorities.

Mr. Churchill: I am all in favour of the borough of Trafford benefiting from the excellent rate-capping policies of the Government. My complaint is that we do not seem to be benefiting. The bottom line for my constituents is that, in spite of the Secretary of State's promises and the £250,000 added to us for being a low-spending authority, Trafford is this year losing £3 million, or 15 per cent, of its rate support grant, and that is an unacceptable level of penalty.
I regret to say that this is not a one-off situation. Last year we lost £2·5 million, and the year before that £1·9 million. In the preceding year we lost £2 million. If we take a 10-year perspective, it is estimated that at current prices, and allowing for the transfer of part of the grant to the Greater Manchester council, Trafford's 1975–76 grant would be worth £40 million. If the 26 per cent, overall reduction nationally in rate support grant is applied, Trafford's grant this year, on the basis of the 1975 settlement, would be £29·6 million. That means that Trafford has lost £11 million over and above the national reduction.
I am sure that my right hon. Friend the Secretary of State will concede that no local authority could have followed the Government guidelines more closely than Trafford. In each of the past four years it has been within £2,000 of the low side of the Government's guideline, with the exception of 1983–84, when it undershot by £1·75 million. I believe that Trafford should be congratulated on the responsible way in which it has budgeted and sought to remain within the Government's guidelines. However, it has been losing about 10 per cent, of its rate support grant year in and year out.
This year the Government have excelled themselves. Trafford's loss this year, including the clawback of £1 million in respect of previous years, is about 15 per cent. What is the Secretary of State's purpose? Why does he insist once again on kicking in the teeth his most loyal supporters? I freely exonerate my right hon. Friend from any charge of malice. However, following his remarks in opening the debate, about the complications of the formulae and the abstruseness of the acronyms that are involved, we must wonder whether he and his ministerial colleagues begin to understand the system, let alone its unfairnesses.
Trafford suffers from being labelled a high-resource area. One of the key reasons for that is that it encompasses the vast industrial area of Trafford park. As is recognised in a recent White Paper, which was referred to by the hon. Member for Woolwich, the industrial areas of the north of England are seriously overvalued and, therefore, overrated. The Government's failure to proceed with a rating revaluation—there has not been one since 1973— means that my constituents are being penalised in each RSG settlement.
Trafford is not alone in being labelled a high-resource area. London is in the same boat. However, unlike London, Trafford does not have its difficulties acknowledged by the Government. The London boroughs benefit from the effect of the so-called multiplier. Paragraph 9 of the rate support grant White Paper states:

Multipliers are a device for adjusting grant entitlement. They can be used for a number of reasons—for example, to … discount part of the rateable resources in a particular area eg in London".

Why should all the privileges and cash go to London? Why should an industrial northern area such as Trafford not be entitled to benefit in the same way and to be protected from being, allegedly, a high-resource area?

Mr. Simon Hughes: I appreciate the problems which the local authority within the hon. Gentleman's constituency has to face, but the implications are the same when a London borough has suffered a reduction in its share of the budget from 16 to 15 percent. If that happens, we may reach a similar conclusion. I hope the hon. Gentleman will agree that he cannot conclude that London must be happy because it is a net beneficiary of the readjustments of which he is complaining, because it is not.

Mr. Churchill: London has benefited for a long time from the multiplier effect. Its effect is to enable most London boroughs to enjoy a discount of 30 per cent. I believe that Tower Hamlets receives a 45 per cent, discount. This obviously has a bearing on the resources available to it. If this system were applied at the London level in the Manchester borough of Trafford, the resources that it receives from central Government would increase by £12 million to £15 million. I ask my right hon. Friend the Secretary of State to take into account the clear bias and unfairness that exists because there has been no proper rating revaluation. This has had an adverse effect on industrial areas in the north. Secondly, high-resource areas such as London are discounted, whereas Manchester is not.
Last year I and my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) took on trust the assurances of my right hon. Friend the Secretary of State and his ministerial colleagues that positive steps would be taken to help low-spending authorities. I cannot accept that to give Trafford £211,000 with one hand and to take away £2 million with the other is an acquittal of that promise. As a strong supporter of the Government's policies across the spectrum, it will give me no pleasure whatever to be unable to support the Government when the House divides later this evening.

Mr. Peter Pike: During the election campaign prior to the Conservative Government taking office in 1979, Conservative party candidates promised to give more freedom to local government. They promised also to abolish the rating system. Local government has not been given more freedom. Indeed, it has been subject to increasing restrictions year after year.
I was involved in local government until last year. At the time when I was elected to this place, I thought that local government had seen the worst of the Government's impositions. Unfortunately, local government finds itself in an even worse position. The controls that the Government have placed on capital and revenue expenditure have tied down local government and made it impossible for councillors to do the job for which they are elected. I often wonder now why members of the public stand for election as councillors. If elected, they will be unable to do the job that they wish to carry out on behalf of those whom they represent.
We have seen no change in the rating system since 1979. I recognise that the present system is an easy and cheap form of taxation and that it is difficult to agree on an alternative system that would not produce more anomalies and problems. However, the Government have failed to meet their promise to abolish the rating system.
A considerable burden has been transferred from the Government to local ratepayers since the Government were elected in 1979. The RSG settlements since 1980–81 show that a massive burden has been transferred from central Government to local ratepayers. That would be so even if we assumed that there had been no inflation and that the costs of running local government during that period had remained static. The 1980–81 RSG settlement was 61 percent. In 1981–82 it was reduced to 59 per cent., in 1982–83 to 56–1 per cent., and in 1983–84 to 52·8 per cent. For the current year it is 51·9 per cent., and we are talking of 48·7 per cent, for the following year. That means that an additional burden of 13 per cent., which would have been borne by the Government if the settlement were still 61 per cent., has been transferred to local ratepayers. At the same time, additional burdens and tasks have been thrown on local government by central Government.
The Government admit that they cannot assess the costs borne by local government. It is extraordinary that the Government can introduce policies without fully knowing the cost implications to local government in terms of staff and revenue. It is clear that, even without taking account of holdback and penalties, the Government are responsible for most of the rate increases in recent years.
The Secretary of State referred to rate increases next year in single figures, yet the Association of District Councils forecasts that 67 shire district councils will need rate increases of more than 20 per cent, and 164 district councils will need increases of between 10 per cent, and 20 per cent., with the average increase likely to be 11·7 per cent. The ADC is certainly not a Socialist-controlled body, yet it says that this year's RSG settlement is harsh, and I certainly agree.
My hon. Friend the Member for Copeland (Dr. Cunningham) said that 38 out of 39 shire counties had cash targets below their grant-related expenditure assessment level. Lancashire is in that position. If Lancashire county council were to spend up to its GRE figure, it would incur penalties of £46 million. The GRE is, however, the level considered to be necessary to provide a typical standard of service, according to the Government's criteria. That level is not determined by the local authorities; it is the Government's basis for determining what a council should spend.
Lancashire's GRE is just over £532 million and £22 million over its cash target figure. Expenditure above that level results in the council incurring a penalty. That is nonsense. To maintain its present level of services next year, Lancashire would need to increase its precept by 46 per cent. I do not envy the councillors' unpleasant task of dealing with their budget in the months and years ahead. The council really needs to spend more on education and social services, and surely it cannot be expected to cut fire, ambulance or police services.
I am annoyed about the way in which we allow subsidies to be provided for private residential homes for the elderly. There has been a massive growth in the number of those homes. Would it not be far better to allow those Government subsidies to be transferred to local

government to provide care for the elderly than to permit profit to be made from them? If the Lancashire county council does not make economies, the ratepayers will be heavily penalised by the Government. That is wrong. The Government must think again about their proposals.
The position of the borough of Burnley differs from that of the county of Lancashire. The borough's cash target is higher than its GRE. The GRE assessment for the year ahead is £5,422,000, which is £50,000 less than this year. We are not certain why the figure is lower. The cash target has increased by 3·75 per cent, on this year's target to £8,481,000—much higher than GRE. During the current year, the council is budgeted to spend slightly over its cash target. If the council budgets in 1985–86 to spend at target, what will happen as a result of the Government's proposals for next year's RSG? The reduction in grant alone will cost Burnley ratepayers £510,000, or the equivalent of a 6p rate on top of this year's 40p rate. Just to spend at target, the council will have to increase the rate by 8p to 52p. That is what will happen without inflation and extra services.
At the top end of spending on this basis, the rate of grant will be down by 12·5 percent. That is the penalty incurred for having a cash target higher than GRE. Once a council spends above its GREA, the rate of grant decreases. When a council spends at the threshold level, RSG decreases again. That causes a considerable difference at the top level of 12·5 per cent. That is what the measures will mean to Burnley next year.
Burnley council feels that its GRE is far too low. That point has been made on many occasions to Ministers, but there has been no reaction from them. It is nonsense for Burnley to experience such a large difference and to receive such a large part of its grant at the lower rate once it has gone above GRE. The ratepayers of Burnley must, therefore, meet a much higher percentage of the cost, and that is wrong.
The Government recognise Burnley as a deprived area according to its designation in the Inner Urban Areas Act 1978. In 1983, Burnley was designated as a deprived area. Because expenditure arising from Burnley's designation is not disregarded and because there has been no adjustment in GRE, there have been revenue implications. Burnley can, therefore, incur further penalties, and that is wrong.
Burnley has not yet finalised its budget for 1985–86. At this stage, its estimates are well above target. Burnley council is not a high spender or overspender. Burnley is an old industrial town. It is like other towns in Lancashire, such as Preston and Blackburn, on which this country's wealth was built during this century and the last. Those towns, which have experienced industrial dereliction, must deal with many problems. Inflation has caused some increase in expenditure, because the inflation rate is higher than the increase in target.
I am worried about the fact that, year after year, the Government fail to recognise that capital allocations have revenue implications. Many people, on noting housing investment programme allocations, tend to think that that money is handed on a plate to local government. They do not think of HIP as permission to local authorities to borrow money or of the revenue implications. Capital allocations affect staff and thereby revenue.
Each year, Burnley council has great difficulty in ensuring that revenue demands are containable within the budget. Our HIP allocation is totally inadequate. Indeed, next year's allocation has been decreased by £1 million. We cannot deal with the housing problems facing us in


Burnley. Burnley and many other towns are heading in the near future for a housing crisis in the public and private sectors, but that is a subject for another debate. It is appropriate to consider the revenue implications of the HIP allocation in today's debate.
When I was chairman and leader of Burnley borough council I believed that the grant portion of the HIP allocation had only a small revenue implication and that the council should spend more of the grant in the private sector because the revenue implication was less than new build of sheltered housing or improvement of council houses. However, the 10 per cent, revenue implication for Burnley on meeting the debt charge for improvement in the private sector is now running at about £250,000 which is equal to a 3p rate.

Mr. Straw: Does my hon. Friend accept that there are indirect as well as direct revenue implications from HIPs in boroughs such as his and mine upon all the current services of the borough and Lancashire county council from not solving the mounting housing crisis due to the additional burdens that will be placed on the social services?

Mr. Pike: I accept that point. The burden on social and other services will increase rapidly. In the long run, the cost to central Government will be high because we will reach a stage where we can no longer improve the housing stock but will face demolition and clearance, which is far more costly.
Ministers often imply that council balances are too big and that they should reduce them. As I have said more than once, a balance can be used only once. Once it has gone, the implication has to be met the following year. It also reduces revenue because interest is obtained on investments.
Next year only 20 per cent, of capital receipts can be used. That has serious implications. This year Burnley will have spent the 40 per cent, permitted. That will reduce the income to the housing revenue account from the money that has been invested and held in reserve. I utterly oppose the reduction. Capital receipts supplement the capital programme. If the council can pay from capital receipts, there are no revenue implications. Councils should have been permitted to continue to spend at the present level of their capital receipts.
Burnley is not an overspender. That applies to all Labour-controlled councils which are referred to continually as overspenders. They are trying to provide services for the elderly and transport for those who need public transport, to improve industrial requirements to maintain jobs, and to clear industrial dereliction and take their boroughs and citizens into the next century in the type of environment to which they are entitled. They are not overspenders. I challenge the Secretary of State to come to north-east Lancashire to see its towns. If he believes that we are overspending, let him tell the public what he would want to cut and where we could save money. I am opposed to the Government's proposals for next year's RSG.

Mr. Robin Squire: Unlike most speakers, may I begin with a kind word for my right hon. Friend the Secretary of State? [Interruption.] I have no interest in the Secretary of State. My kind word arises from

the outcome of the 1984–85 settlement. It is worth putting that on record, because we were told then by many prophets of doom that rate increases would be 15 to 20 per cent. They turned out, as my right hon. Friend said, on average to be 5 per cent., and some were even reduced.
My right hon. Friend has also said that he believes that the picture will be similar for the 1985–86 settlement. I join him in hoping that that will be true as I need no convincing that high rates are damaging to employment prospects and industry generally.
I hope that my right hon. Friend who is to reply to the debate will take it in good part if I devote the rest of my speech to analysing the 1985–86 settlement with, I hope, constructive suggestions of how we may proceed a little better.
It is perhaps stating the obvious that no one but the Treasury seems to welcome the RSG. This year is no different from any others. There seems to be a growing tendency for so-called high and low-spending authorities to claim piously that they, more than any other group of authorities, have been treated worse by the settlement. A moment of thought will convince us that both groups cannot be right. It is a consequence of the complexity of the system, which, in fairness, my right hon. Friend the Secretary of State has acknowledged, that all groups of authorities sooner or later find themselves out of sympathy with one or other of the many complex ways in which the settlement operates.
I shall consider, first, the rate-capped authorities. I fear that one consequence of the system will be the reduced accountability of rate-capped authorities to their electorate. The Government's stated intention is to have low rate rises and lower expenditure in real terms. In broad terms, I applaud that. As a consequence of the settlement, some authorities have received more grant and many have received easier targets. Let us consider the example of the Islington people's republic. It did not receive any grant in 1984–85. It has now been rate-capped and is scheduled to receive £25 million in 1985–86, and, because targets are based broadly on 1984–85 budgets, its target will be only 1·5 per cent, down on that figure, which, in relation to other London boroughs, was comparatively high.
I accept that penalties for overspending have been made considerably more severe in this settlement, although they are predominantly—

Mr. Jeremy Corbyn: How much grant is Islington due to receive in the next financial year under the settlement announced by the Secretary of State?

Mr. Squire: As I said to the House a moment ago, according to the figures that I have, Islington is scheduled to receive £25 million in 1985–86. No doubt if I am wrong the hon. Gentleman will give us another version.
The effect of raising penalties on overspending will be felt proportionately more by the marginal overspenders than by the large overspenders. It is difficult to get away from the feeling that at least some of the wages of sin are high grants.
The key point is that the total of the grant adjustments and various assumed spending level adjustments affect rate demands by much more than adjustments in local authorities' spending levels. That worries me a great deal. I believe—I hope that my right hon. Friends accept this —that we should be moving towards greater accountability of local authorities to their electors, rather than


appearing at times to be moving in the opposite direction. I contrast that with the position of low-spenders. This year—this is welcome—they received an improvement in their target figures of 4·5 or 4·625 per cent. on their 1984–85 budget.
However, the system, in effect, underplays the cumulative effect of years and years of overspending or underspending. Regardless of one's political view, that means, as we have already heard today from other hon. Members, that many so-called low-spending authorities face massively steep cuts in Government support. I can give a few examples. The royal borough of Kingston falls from £15·7 million to £14 million; Surrey county council falls from £46·5 million to £36·2 million—at that rate it will receive no grant in another three years—and Essex county council goes from £147 million to £132 million. They are all low-spending authorities. I know that my right hon. Friend, when he replies, will say that it is an unavoidable consequence of the system, arising from its treatment of high resource authorities, but it comes a little hard on such authorities when they compare that treatment with the treatment apparently meted out to the high-spending authorities.
I will use my own authority, the London borough of Havering, to illustrate what I think will happen in London. If I get it wrong, I am sure that my right hon. Friend will point me in the right direction. The London borough of Havering, like most outer London boroughs, is a responsible authority. As I understand it, the GLC capped precept for 1985–86 will be under 1 per cent. less than the current year, so we can probably assume that there will be approximately the same precept for the coming year as for the current year.
In addition, outer London boroughs will need to find the LRT precept of 10·8p. There is an overall reduction—we all know about it—of central Government grant, and clearly London will take its share of that reduction. All boroughs must also find money to fund the inflation-adjusted cost of their existing services, plus the inevitable improvements in some services. I do not believe that it is possible to find all that money without having a rate increase higher than the rate of inflation. I say that with some sadness, because I hope that we would seek to have rate increases at or about that level, but I am worried that it would be difficult, if not impossible, for that to be so in outer London.
I should like briefly to put down a marker for the settlement for next year. I noticed that it was done in the debate last year, albeit in a different context. My short and simple point concerns the financial arrangements for the abolition of the GLC. The present proposal is that certain functions will be charged to the boroughs on the basis of population, whereas in the past they have been charged on the basis of rateable values. I am the first to accept that in theory, by the time that we have passed through the equalisation process and all the other measurements, everything will turn out to be exactly the same, but that is in a perfect world. In this respect, perhaps more than in most others, I submit that we do not live in a perfect world. There is real concern in outer London boroughs that they will suffer as a result of the proposed new basis. I hope that my right hon. Friend will consider that problem in time for next year's settlement.
I should like to place on record the importance of the continuation, for much of London and the London boroughs, of the equalisation scheme whereby the inner

London high resource authorities fund the rest of London. Much of that resource is generated by the activity, in employment or shopping terms, of outer London residents, and it is only fair and proper that they should continue to have some share of that benefit in the future.
With regard to grant-related expenditure, I should like to follow some of the interesting points made by my hon. Friend the Member for Uxbridge (Mr. Shersbyl, who is not at present in the Chamber. I welcome the improvements which have been made in refining GRE statistics, although there are still one or two bugs in the system. The two largest areas of expenditure are education and social services. The GRE figures for London boroughs show that no more than two or three of the outer London low-spending boroughs can come down to anywhere near the level of their GRE figures. I shall need some convincing that that is because they are wild overspenders and not because there are inherent faults within the system of measurement which, I am sure, also apply outside London. It seems unlikely in the extreme that all the otherwise very responsible authorities should consistently find themselves way above the figures for grant-related expenditure. If targets are to be abolished some day, and if GRE is to become virtually the sole source of control and measurement, reform will become even more essential because of its higher elevation within the system.
I welcome—as I am sure almost every hon. Member must—the recent announcement of a review of the system of funding local authority expenditure. However, there is some danger of the announcement that there is to be a review of local authority finance becoming the equivalent of, "Your cheque is in the post." None the less, we cannot have everything in life. Above all, I assume that my right hon. Friend will confirm that there cannot realistically be a prospect of a new system being in place before the next general election. Therefore, we shall be looking at at least three settlements—or perhaps more—the basis of the present system. That is why it is so important to improve it.
The present system relies on rateable values that are now 12 years out of date. It relies on a total rate support grant that has fallen below 50 per cent. On the basis of the principle that he who pays the piper should call the tune, now that local authorities are meeting more than half the expenditure, will my right hon. Friend, as a starter, consider removing the existing targets and controls from low-spending authorities, as they are already paying, in virtually every case, more than half the cost of their services? That suggestion at least seems to be worth looking at.
I remain convinced, as I think several hon. Members know, that the only real solution is a major long-term reform which above all recognises the social revolution that we have experienced. The old concept of one rateable unit and one wage earner in a household has long gone out of the window. The fact is that several earners within a home are competing, so to speak, with those homes with only one earner and it is the central fault of the present system. That is the only reason why putting still greater weight on local expenditure, as against income tax, must remain a little suspect until the necessary reform is in operation.
In essence, the whole problem with targets and penalties is that, the more we have, the more we seen to need. Perhaps it is a consequence of pressure building up. The more we seek to stop pressure here and there, the more


we seem to need it. It is almost a form of addiction—a sort of local government bondage. The more controls we try, the harder it is to give up the habit.
Years ago the last Labour Government—it was years ago, fortunately — successfully managed to shovel largesse to their friends quite shamelessly year by year. Today, despite a vast amount of human and computer effort, and consequent expense, we simply cannot do that. That may be a gain or a loss, depending on how people look at it, but it is a reality. Perhaps, until we get the necessary reform, the safest thing for all of us to accept is that virtue in general will be sparsely rewarded, and that those seeking to achieve anything better than that will have to look forward to the long-awaited outcome of my right hon. Friend's review.

Several hon. Members: rose—

Mr. Speaker: Order. Before I call the next speaker, I should tell the House that I understand that the first Front Bench speaker would like to rise at about 9 o'clock. I estimate that if those who are in the Chamber now speak for approximately 10 minutes each, I shall be able to ensure than everyone who wishes to participate in the debate will be called.

Mr. Jeremy Corbyn: There is a common theme to debates on local government matters—that, in the many hours intervening between the time when the Secretary of State opens the debate and the Under-Secretary replies, there are no speeches in support of Government policy either from Tory or Opposition Benches. That is because every hon. Member is under great pressure from his own local authority or from people in his area, concerning local authority services and the way in which Government funding is continually taken away from local authorities.
With glee, Tory Members ritually attack the inner city authorities, the Greater London council, the metropolitan counties and all the others, and have voted through the Rates Act and with it rate capping. They will rue the day that they did that, because the Government are fundamentally attempting to destroy democracy for local government. They have been doing so since 1979. The political principle on which they have operated is sheer selective vindictiveness against the poorest people in the country. Every inner city area has been penalised by the Government because the Government's notion of overspending is that, if a council tries to provide services that go some way towards meeting some of the needs and aspirations of the poorest people, they kick the council in the teeth. If a council continues to do that, despite the Government's blandishments, it does not get kicked in the teeth, but has its head cut off and suffers an unprecedented media barrage inspired by the Government. If one looks at any inner city area, one finds that disgraceful pattern.
The Government's policies are not only unpleasant and vindictive but, in their own economic terms, very shortsighted. If all those councils made the cuts that are requested by the Government, what would be the cost in economic terms of paying redundancy money, unemployment benefit and supplementary benefit, and of the loss of tax income, rate income and all the other incomes that would be lost from those deliberately made unemployed

by Government policy? There is a circular effect. The Secretary of State for the Environment might not care to reflect on that side of it, but when his term of office ends, as I hope it will soon, he might care to reflect that, during his time as Secretary of State for the Environment, he has done more damage to local government than any of his predecessors, without exception, because he has sought to destroy the very basis on which local government was set up.

Mr. Nicholas Baker: I have great respect for the hon. Gentleman because I know that he has some knowledge not only of inner cities but of Dorset. However, can he modify his strictures a little? Under the system, a county such as Dorset, which has followed the Conservative Government's guidelines, comes out worse, so it is said, than many other local authorities, particularly in inner city areas.

Mr. Corbyn: I thank the hon. Gentleman for his intervention, because it illustrates my point.
I represent an inner city area that has suffered badly at the hands of the Government, on rate support grant. It must be said that Islington borough council has not sought to follow the Government's guidelines on spending and has been penalised. However, county councils, shire counties and others that have followed the Government's guidelines are now also being penalised and the Government seem unable to recognise that a county council has services to maintain, often at great expense, as do councils in rural areas—something which, again, is not understood by the Government.
Tory Members might rub their hands with glee at the attack that the Government are making on Islington and other councils like it, but the time will come when the same attack will turn on them. There is an inexorable logic in the Government's process of destroying all local authority independence and democracy as they proceed over the years. Therefore, I hope that tonight there will be a large rebellion by Tory Members against the report, because it will destroy all forms of local government as the Government carry on destroying the welfare state.
I should like to refer to the effect of the Government's cuts on my constituency and Islington borough. I shall try to demonstrate to the House that, had the Government not changed the rules on local authority spending and not so shamelessly attacked certain borough councils, this year the ratepayers of Islington would not face large rate bills but there would be a cut of about 50 per cent. in those bills. That would have happened if the Government had played by the rules under which the current borough council in Islington was elected in 1982. The same could be said of many other local authorities.
The Secretary of State has said that the borough of Islington's budget should be £85·6 million. The council carefully examined all the costs of its services, the needs of the poorest people whom it represents and the implications of the manifesto on which it was elected in 1982. It feels that the budget should be £94 million. That argument can be supported in detail by the borough council. If the Secretary of State wishes, he is free to visit the borough of Islington and find out for himself what is going on there. I renew my invitation to him to come to Islington and join in a public debate on why he selected it for such vindictive treatment. I understand that the last time that he visited Islington he took part in a dinner of the Conservative association—

Mr. Tony Banks: Has it got one?

Mr. Corbyn: The borough has a Conservative association, but it keeps behind closed doors.
The Secretary of State proposes a cut of £8·4 million in the budget of the borough of Islington. The effects of the cut would be felt by everybody in the borough. There would be a loss of around 800 jobs, the closure of several important facilities and cuts in the street sweeping services, the library service, services to help those with disabilities, day centres for the elderly, and home help services. With that tale of misery, a further 800 people would be in the dole queue in a borough where the unemployment rate is already well over 20 per cent. In the two Department of Health and Social Security districts that cover most of my constituency, there are already over 34,000 registered claimants. Therefore, by any stretch of the imagination, it is an area of high unemployment and enormous, grinding poverty.
The Government's solution is to take money away from my borough and my constituency by cutting rate support grant and health spending and by rate-capping the other two authorities that are of great assistance to us—the Inner London education authority and the GLC. Therefore, we are not just rate-capped but tri-capped by the Government. I hope that the Minister for Local Government, for one, will begin to understand—he has some experience of local government—exactly what the effect of all that is.
If the Government had not altered the rules on holdback of grants, the borough of Islington would be £23 million better off. If they had not altered the slope, we would be £28·1 million better off. If they had not changed the rules on the GRE formulae on housing expenditure, we could have a budget of £94 million, which is what is needed for this year, and there would be a rate reduction this year of 40 per cent. for the ratepayers of Islington. That is the truth, which the Government are not prepared to listen to or concede. They are guided in their proposals for local authorities not by notions of efficiency or of the way in which local authorities should be run, but simply by vindictive action against the poorest inner city areas. That is what the rate-capping proposals are about. That is what the abolition proposals are about. That is what the rate support grant cut is about.
In examining each local authority's performance, instead of penalising those which attempt to provide for the needs of the elderly and single people and the housing problems in inner city areas, the Government should look at the high unmet need in any inner city area. I happen to represent Islington. Its needs are not that different from those of any other inner city constituency. We would like more home helps working for the council, more day centres for the elderly and better facilities for the physically and mentally handicapped, because in all those areas there are waiting lists, not at the wish of the council but simply because the Government treat our local authority in the same way as every other.
I believe that we are now coming to the end of the period when local authorities were in a position to argue with the Secretary of State and, if necessary, raise the rates in order to maintain services. That is a painful process that local authorities have gone through every year since 1979. But since the announcement of the rate-capping proposals

and the further cuts in the rate support grant, we are reaching the end of the road on which local authorities can negotiate their way out.
The Secretary of State has succeeded in uniting a large number of local authorities of differing areas and in some cases differing needs, uniting all the local authority trade unions in support of those authorities' policies, but also uniting a huge volume of public opinion against the Government because people in the poorest inner city areas realise that public spending through local authorities matters, it is important, and it is a way of redressing some of the imbalances that are endemic in society as it is currently organised.

Mr. Tony Banks: Is not the point that my hon. Friend is making further support to the point that I tried to make to the hon. Member for Woolwich (Mr. Cartwright) when he suggested that Labour authorities should go and argue their case with the Secretary of State? The Secretary of State is not interested in listening to a rational case. All the evidence on local government restructuring in the country is against what the Government propose, but the Government wilfully ignore it. What is the point of listening to people who have open mouths but closed minds?

Mr. Corbyn: Precisely. The Secretary of State continually says that the local authorities on his hit list should come and negotiate with him and talk to him. Frankly, they have had nothing but attacks from him for the past five years. Why should they assume that anything will be different now? Why should they assume that he wants to do anything but try to destroy the unity that has been built up between those authorities and the trade unions that support them?
The Secretary of State has created a monster in his rate support grant proposals and his rate-capping proposals. He has created the most enormous opposition to himself and the Government. The Government may well squeeze this nasty little measure through the House tonight, but the opposition that they have created will live for a long time. The unity of that opposition will live for even longer. It will destroy him, his Government and this kind of attack on democracy, and it will lead to the election of a Labour Government committed to the restoration of genuine local democracy that has been so shamelessly destroyed by the Government.

Mr. Mark Wolfson: I shall endeavour to respond to your call for brevity, Mr. Speaker.
In following the hon. Member for Islington, North (Mr. Corbyn) — I am aware, having fought my first parliamentary election in that constituency, that Sevenoaks is an area with very different conditions from those of north Islington—I wish to bring to the attention of my right hon. Friend the Secretary of State the way in which the rate support grant settlement has affected the Sevenoaks district council.
The council has done all that the Government have asked of it. I believe that three examples will suffice to demonstrate this fact. First is the record on rates. Expenditure has increased by only 8 per cent. over the last five years against an inflation rate in that time of some 50 per cent. Rate increases in Sevenoaks have gone up by 4·6 per cent. in four years. As to staffing, in the council there


were 779 full-time staff in April 1981 and by October 1984 the numbers were down to 559, a drop of 28 per cent. in three and a half years. This has required major reorganisation of management, of structure, of staffing and of working methods. Nevertheless, the council has continued throughout 1984 to plan further economies, further streamlining of services and further productivity increases. At least some of these schemes are unpopular with ratepayers and politically difficult, but in my view they have been right and proper decisions courageously taken by councillors who are determined to achieve value for money for their ratepayers. I will not labour the point, but by any standards this is a record to be proud of. I believe that my right hon. Friend would not disagree.
However, financial planning for 1985–86 is made nonsense by the announcement by the Secretary of State last December of the rate support grant as it affects Sevenoaks and other district councils. Without adequate warning, this year's grant to Sevenoaks has been reduced for 1985–86 by a staggering 18·5 per cent. Of this reduction, one third had been anticipated by the council and taken into account in its proper and prudent budgeting, but the other two thirds comes as a bolt from the blue, far too late for the council—if, indeed, it has any further scope to do so—to make additional cost reductions in time for next year. This means, therefore, as night follows day, a rate increase way above the Secretary of State's guidelines and what the district council wished or deserved to have to levy.
I want to make it clear that neither I nor the Conservative-controlled council is disputing the necessity for the Government to achieve a reduction in the overall level of Government support for local authorities on current spending. That policy has my approval and support. What I do complain about most forcefully is the way in which the rate support grant settlement has continued to penalise the prudent and in some cases to reward the profligate. My hon. Friend the Member for Uxbridge (Mr. Shersby) has given another example on a far larger scale, as has my hon. Friend the Member for Davyhulme (Mr. Churchill).
From my discussions with my hon. Friend the Member for Bristol, West (Mr. Waldegrave) and his advisers, it is clear that two factors in particular cause part of the problems for my district council. These are the change of criteria for assessing the recreational requirement of district councils and the fact that the spending of town and parish councils within the district is not subject to any overall control.
Parish precepts in recent years have increased by between 10 and 12 per cent. annually. In my view the grant-related expenditure factor for total parish precepts bears little resemblance to actual expenditure, despite the statement that GREs take special characteristics into account. I put it to my right hon. Friend that parish precepts should either come into both target and GREs on an actual basis or be excluded altogether. I ask for his assurance that this point will be considered further by his Department.
I return to the main complaint which I wish to put to my right hon. Friend in the strongest terms. Here is a council that has done all that the Government have asked of it. Prudent budgeting has been penalised and forward planning has been made impossible by an unexpected and

heavy blow delivered at the eleventh hour. The rate support grant system is still a very blunt instrument. Further refining is essential and such refining must surely result in a very much greater reward for those councils that do what is asked of them. We were given assurances about that last year, but it still has not happened. This year's settlement, although necessary for the nation as a whole, is still far from satisfactory in its application to my own and other careful authorities.

Mr. William O'Brien: As I listened to the Secretary of State's presentation of the reasons why he believed that the House should accept the proposals, I thought on more than one occasion that it resembled something out of the well-known series, "Yes Minister".
The hon. Member for Sevenoaks (Mr. Wolfson) brought in a new dimension when he pointed out that parish precepts were not covered by the legislation. If he is suggesting that parish council rates should attract rate support grant—he will be aware that at present they do not—I am sure that he will have the support of many Opposition Members. I hope that he will press his right hon. Friend on that.
In addition to 1985–86, the year under discussion, the Secretary of State advised the House that he could not envisage any relaxation of control or rate-capping for the following year, 1986–87. There are already problems this year. The right hon. Gentleman said that, although last spring there were claims that the rate support grant then proposed would mean rate increases of 15 to 20 per cent., rates had in fact been kept down. He boasted that that proved the success of the Government's restrictions, but rates have risen by only 5 per cent. or so because local authorities have had to cut their services. If they had been allowed to maintain services at their previous level, rates would indeed have risen by 15 to 20 per cent., and to provide that same level of services in the future would mean that the 5·2 per cent. increase proposed by the Secretary of State would in fact amount to a reduction of 0·05 per cent. in the money allowed for the provision of local government services.
The Secretary of State said that high rates contributed to high manufacturing and industrial costs, leading to a loss of employment. He said that rate increases were being kept to a minimum to ensure that hardship would not be caused to industry and commerce. If he genuinely means that, why does he not apply the same philosophy to the regional water authorities, which also levy rates? The Yorkshire water authority has imposed increases of 19 or 20 per cent., but rate-capping does not apply to that precept. If the Secretary of State is sincere in the belief that he must control high-spending authorities, he should apply the same rules to regional water authorities, which are creating the same problems for ratepayers as he claims Labour-controlled local authorities are creating in their areas. Incidentally, the chairman of the Yorkshire water authority has laid the blame for those increases above the rate of inflation fairly and squarely at the door of the Secretary of State. I hope that we shall have an explanation from the Government on that, as it seems very strange that there should be two sets of rules in the same game.

Mr. Tony Banks: It would also be interesting to hear an explanation from the Secretary of State as to why rate-capping does not apply, for example, to the Metropolitan


police precept or to that levied by London Regional Transport since that area of authority was taken away from the GLC.

Mr. O'Brien: I am grateful to my hon. Friend for drawing attention to those other anomalies. It is clear that the Government wish to attack only Labour-controlled authorities providing the services required by the people in their areas. The cut in rate support grant has created further problems for local authorities seeking to provide the necessary services for the people whom they represent. Having served in local government for 30 years, and having witnessed the recent actions by the Government, I am glad that I am now out of that area so that I do not have to explain to people that education, recreation, planning and social services can no longer be provided adequately because of the cuts in rate support grant and the rate-capping measures introduced by the Secretary of State.
There are also problems in the joint financing system involving local authority social service departments and area health authorities. In Wakefield and Leeds — I represent people in both ctities—the joint financing so necessary to provide the services required by an aging population and to meet the needs of the mentally sick and the disabled have been seriously affected by the cuts and restrictions imposed by the Secretary of State, so that the people most in need are being denied those services as a result of Government action. I ask for some special consideration to be given to the jointly financed schemes.

Mr. Patrick Jenkin: In order to keep my speech short I did not talk about the disregards. However, I have made it clear that next year we will repeat the disregard for penalty for authorities' increased expenditure on schemes jointly financed with health authorities. The arrangements that apply this year will apply next year, too.

Mr. O'Brien: I am grateful for that intervention. A number of hon. Members are very concerned about jointly financed schemes. I hope that the problems facing social service departments which have jointly financed schemes will be given serious consideration—problems connected with the aging population and the care of the mentally sick and the mentally handicapped.
Other hon. Members have referred to the rating system, to the anomalies that exist in the system and to the problems inherent in it. I share the concern that has been expressed. The valuations are 12 years old. The Secretary of State has said that there is to be a review of the financing of local government. If rates are still to be levied on rateable values, I urge the right hon. Gentleman to consider updating the valuations on which rates are levied. The system is 10, 12 or 15 years out of date. When those whose rates have been assessed on those out-of-date levels appeal against assessment, they have to refer back to the value of the property 12 or 15 years ago. That is most confusing. I am sure that the Secretary of State could ease the problems by dealing with some of the anomalies in the system. I appeal to him carefully to consider doing so.
As there are anomalies, and as services are to be cut in many areas, and in my own area in particular, I ask the House not to accept the report. Some Conservative Members have, on behalf of their constituents and local authorities, described problems similar to those described

by my hon. Friends. There is some unity about the problems facing local authorities. I hope that those hon. Gentlemen will join us in rejecting the report.

Mr. Michael Lord: I am grateful for the opportunity to say a few words about the rate support grant settlement in general and its effect on Suffolk.
If the House stands for anything, it stands for justice and fairness. I am not entirely convinced that, in this settlement, Suffolk is given a fair deal. I support fairness. That is why I support rate-capping and welcome unreservedly the Secretary of State's hope that he may be able to abandon targets next year.
I understand only too well the almost impossible dilemma in which my right hon. Friend finds himself in bringing back under control the runaway expenditure of local authorities in toto. He has the difficult responsibility of controlling local authority expenditure as a whole while, if we are not careful, some hon. Members are tempted to concern themselves solely with their own local problems. I also understand how difficult it is to cut back the wildest spending authorities as quickly and harshly as would be appropriate without causing a degree of hardship and perhaps unrest that would be too high a price to pay.
My right hon. Friend makes no secret of the fact that this is a national problem. It is a problem that we all share. Indeed, some sensible local authorities may have to suffer to some extent as the highest spenders are brought under control. However, that is seen by many people — certainly in Suffolk—as rough justice. In their view, the Government are robbing Peter to pay Paul; and in the past, that has sometimes led the Government to reward profligacy and penalise prudence.
Suffolk county council has a history of managing its affairs carefully and sensibly, yet it now finds itself in a difficult position. In the current year the difference between its GREA and its target is £5·6 million. Next year — 1985–86 — the gap will widen to £12·4 million. In 1985–86 the council will try to use reserves to bridge the gap, but if the situation continues into 1986–87 that will be increasingly difficult to do. Burdens on services will increase and there will be excessive rate increases. For example, the growth in the number of old people in Suffolk far exceeds the national average, yet the number of residential places is below the national average, as is the number of home helps and the provision of meals on wheels, even though I am sure the social services departments are doing their best to manage their services with great care.
The Government may assess the financial needs of a local authority carefully and in detail, taking into consideration all the factors involved, in order to establish its GREA. They may then, by setting a target, deny it the necessary finance. They may do so not because of the behaviour of the authority concerned, but because of the behaviour of other authorities over which they have no control. That cannot be right. I was therefore delighted to hear of the Secretary of State's intention to end targets as soon as possible.
My right hon. Friend has my sympathy in dealing with an intractable problem. However, I return to the question of justice and fairness. The present system cannot be regarded as fair. If, when he replies to the debate, my hon. Friend the Under-Secretary of State is able to confirm my


right hon. Friend's suggestion about abolishing targets next year, I am sure that the whole House will be delighted.

Mr. Tony Banks: One day soon, I hope to find myself discussing in this House something other than local government business. Local government matters seem to be gradually taking over our entire proceedings. Indeed, the Government seem determined to turn this place into a mega town hall and all hon. Members into souped-up councillors—although the material on the Government Benches is not promising.
We discuss the rate support grant every year but, to an increasing extent, the Government are attempting to force the House into interfering with and attempting to control the day-to-day affairs of local government. Hon. Members on both sides have pointed out how arcane the system of local government finance has become. Few hon. Members fully understand it. It is clear that the Secretary of State is not among them. The Prime Minister does not understand it either. A few weeks ago, attempting to answer a question during Prime Minister's Question Time, the right hon. Lady became completely confused between GREAs and targets. I do not blame her for that, but I see her as the spectre behind her Ministers, pushing them into doing things about which they are unhappy. If Ministers are unhappy about what they are doing, they know what—in all honour and integrity—they should do about it. However, I doubt whether we shall see much of those qualities.
The subject has become confused and difficult to understand. That might explain why so few right hon. and hon. Members on either side are present. That has been true for all this important debate. Hon. Members are getting fed up to the teeth with being required to discuss and make decisions on matters that should be left to locally elected councillors. That is why hon. Members decide to take their pleasures elsewhere. We elect councillors to deal with these issues. Why do the Government want to interfere in the day-to-day running of town halls and county halls.
We have heard that the level of rate support grant for next year is to be nearly £12 billion. That sounds a lot of money, but the percentage of Government funding of local authority expenditure has decreased from 60 per cent. in 1978–79 to the 48·7 per cent. of next year. That represents a massive switch of tax burdens from the Government to local government. It is no great surprise that local authorities — Conservative and Labour-controlled — are beginning to rebel.
The grant-related expenditure that the rate support grant proposes for the Greater London council shows a need to spend GREA of £549 million — an increase of £32 million on the settlement for 1984–85. However, if we allow for London Regional Transport and the transport supplementary grant, it represents an increase of about 18 per cent. That leaves a substantial gap between the council's basic budget of £853 million and the £549 million "need to spend" assessment. We can therefore see the great problems that the GLC will face.
The Secretary of State has told us that GREAs have been altered. The GLC was surprised and pleased to learn that there was an increase of £27 million in its GREA for

the housing revenue account. We need to know whether the GREA figure for the housing revenue account for last year contained the large error that we understand it to have contained. We have to explain the great differences in the figures. It does not surprise me that miscalculations are now rife in Marsham street, as civil servants struggle to understand the system — just like Members of Parliament.
I asked the Secretary of State why the GLC's target had increased so remarkably. Far be it from me to complain about that, but I need to know the Secretary of State's reasons. Last year, the GLC was accused of being one of the so-called overspenders but, even after allowing for the removal of London Transport, the increase in the GLC's target for next year is a 63 per cent. hike on last year's settlement. The GLC would like to know why there has been such an increase. I should have thought that many of the right hon. and hon. Members who should be sitting behind the Minister would be interested to know why there has been a 63 per cent. increase for what the Government say is one of the highest spending authorities in the country.
I believe that the increase merely shows that the figures are infinitely manipulable and that the Government can change them at whim. That merely makes the system even more uncertain. Moreover, the GLC's targets for last year were the very targets that were used to criticise that council's expenditure levels. Indeed, they were given, in part, as a reason for its abolition. The Government owe the House an explanation for these dramatic changes.
London's total rate support grant has been eroded steadily in real terms since 1979–80. Had the total been maintained at that level, London would have received about £3·3 billion more grant from 1981 to 1985–86. That estimated loss is based on the assumption that London local authorities will spend in line with their targets in 1985–86. If those targets are exceeded, the loss will be greater. When the Government start talking about the level of rate increases in London, they should remember that, since 1979–80, they have filched £3·3 billion from London ratepayers. That is yet another example of the massive switch of tax burdens from central to local government.
The Secretary of State said today that if all local authorities had shown equal responsibility in spending, there would be no need for these levels of targets. In his defence, I should add that he said that rate support grant had steadily decreased since 1979–80 and that the average level of rate increase has also decreased. However, he said that those are only averages. They cover up all of the big differences between local authorities in different parts of the country. The figures do not tell us about the level and quality of services that are now provided in different local authority areas.
It is easy and cheap for the Secretary of State to talk about over-spending local authorities. It becomes a matter of how the Government manipulate the figures, as I said in regard to the 63 per cent. increase in the GLC's target.
Overspend or underspend is what the Secretary of State decides it will be. They depend on the figures that he manipulates in Marsham street. It must occur to the Secretary of State in his more reflective moments that overspending also comes with local authorities concentrated in urban areas, where the problems are greatest—as we heard in yesterday's debate on infrastructure, investment and unemployment. The greatest concentration of problems is found in our great urban areas. It is no


wonder that socially responsible Labour-controlled local authorities are attempting to protect their ratepayers from the impact of the Government's economic and social policies. The Government's manipulating the figures pushes them into so-called overspending, whereupon the Government systematically attack them, in alliance with their poodle press in Fleet street.
The Secretary of State said that local authorities can now plan their budgets for 1985–86. That is a joke. How can the GLC or any other responsible local authority plan its budget now for 1985–86? The first reason why local authorities cannot budget is rate-capping. We shall have a long and, I suspect, acrimonious debate on rate-capping in a few weeks time. When considering the timetable that the Secretary of State has set, the GLC consulted counsel. Mr. Roger Henderson, QC, advised the GLC that the Secretary of State's rate-capping timetable can be challenged on the grounds of irrationality and procedural impropriety. Mr. Henderson also said that the Secretary of State is acting with unreasonable haste to implement rate limits which are based on faulty arithmetic.
We know how faulty the arithmetic is. The Secretary of State has estimated that the GLC has about £71 million in reserves. According to the GLC's official estimates, given by professional officers to elected members, the GLC's reserves stand in the range of £2 million to £12 million, depending on the outcome of litigation. As we all know, the GLC is perforce in and out of the courts these days to try to defend itself against the attacks of central Government. No information is given by the Secretary of State about how he arrived at the calculation of the GLC reserve of £71 million. How can a responsible local authority plan its budget when it is clear that it is operating on completely different figures from those that the Secretary of State makes up as he goes along? Therefore, the GLC must use the courts to proceed against the Government on rate-capping.
Rate-capping, and the influence it has on trying to make a budget in line with the gratuitous advice of the Secretary of State, is compounded by what Mr. Justice MacNeill said in a judgment in the High Court on 11 January on the demand of the Secretary of State for Transport for at least £50 million more from the GLC than he was entitled to ask in support of London Regional Transport. Mr. Justice MacNeill said that the Secretary of State for Transport had acted
unlawfully, irrationally and procedurally improperly".
In that case, costs were awarded against the Secretary of State for Transport. As my hon. Friend the Member for Copeland (Dr. Cunningham) said, despite the fact that the Secretary of State for Transport acted illegally, he will not be surcharged for what he did, because surcharging does not exist for incompetent central Government Ministers. It exists only to penalise democratically elected local authority members who try to defend their services. The difference in approach and in scale of values as between local government and central Government is deplorable.

Mr. Straw: Is my hon. Friend aware that the Public Accounts Committee of the House roundly condemned the present Minister with responsibility for consumer affairs, then a junior Minister in the Scottish Office, for selling off Hamilton college of education at a loss to the taxpayers of £5 million? If he had been a councillor, he would have

been surcharged and discharged from office. Because he was a Minister, all that happened was that he was promoted.

Mr. Banks: It would appear that Government Ministers can act with total disregard of the laws that they or previous Parliaments have made. That is grossly unfair. Surely all hon. Members on both sides of the House must accept that standards are different for the conduct of central Government Ministers and of locally elected councillors. The dice is loaded heavily in favour of central Government. The Government come along like a bunch of bully boys and stamp all over town halls and county halls; they declare that their mandate is so much greater than that of democratic local councils that they can do what they want. I believe that hon. Members on the Government Benches are beginning to realise how unfair it is.
When the Secretary of State for Transport demanded that extra £50 million from the GLC, I do not believe that he was acting out of sheer incompetence. We know that he is more than capable of that, but in this case I think he was doing it deliberately to make it difficult for the GLC to keep to its budget. Of course, he has been found out and he will have to get his fingers out of the till.
All this makes it much more difficult for a responsible council like the GLC to proceed with its budget making for 1985–86. How can my council make a budget when there is so much uncertainty and so many legally dubious decisions by incompetent and vindictive Ministers? Labour-controlled local authorities and councils are discussing extensively what they can do. Law-breaking comes into it. The Secretary of State for the Environment, in regard to the Greater London development plan and the Secretary of State for Transport, in regard to the excessive demand from GLC for London Regional Transport, are not setting a good example for law-abiding councils because they have both been prepared to break the law.
The Government are gradually forcing local authorities into a position where they must choose between bad and vindictive laws or the services that they were elected to preserve. The Secretary of State for the Environment is criminalising democratically elected and responsible councillors. Sooner or later, someone will have to give ground. I am convinced that it will not be the majority of Labour-controlled local authorities. I am reminded of the words of George Lansbury in 1921. He was not a head banger. He would not be described as an ultra-Left member of today's Labour party or, indeed, of the Labour party of the 1920s. He held firm Christian beliefs. He said that wicked laws ought to be broken. When Poplar council was resisting unjust laws he also wrote:
The question is not whether what we are doing is legal or illegal but whether it is right or wrong.
That question is as relevant in 1985 as it was in 1921.
Labour councils would be well advised to decide whether they should set rates at all. As an option, they should now think about refusing to pay debt charges of any sort. When Third world countries got themselves into financial problems over debts owed to the industrialised world they decided that they would not pay and, of course, rescue operations were mounted. Some Labour local authorities might decide to emulate that example during 1985–86. Local authorities might also decide to defy the Secretary of State and set illegal budgets.
These are real options. I would support and advocate a combination of such measures. I believe, like George


Lansbury, that wicked laws ought to be broken. If laws are to be party political and if this place is to be used to force through bad administrative law which is clearly based on party political spite, it will become a duty rather than a crime for democratically elected Labour local authorities to defy the Government. From that defiance, we will be able to mobilise the sort of support that is needed to throw the Government out of office.

Dr. Michael Clark: I might talk about Essex county council or Rochford district council, because both have suffered as a result of the rate support grant. There are 15 other Members of Parliament who could speak for Essex county council so I shall confine my remarks to Rochford district council.
Rochford is a well-run council which has never before taken issue with the Department of the Environment on rate support grant calculations, even though those calculations leave a lot to be desired. Rochford has supported the Government in all their objectives to reduce public expenditure. It was the first council to consider privatising refuse collection. Although in the end it did not go ahead with it, its refuse collection costs compare favourably with neighbouring Southend, which has privatised its refuse collection service. In recent years Rochford has cut its staff by 15 per cent., even though it was tight on staff compared with other councils of a similar size. It sold off surplus buildings and centralised offices. In its policy on council house sales it was well in advance of Government legislation.
As a result of these prudent policies Rochford has, over the last nine years, kept its rate increase every year to single figures. Generally, rate increases have been about 6 or 7 per cent., but in 1979, the year in which the Government were returned to office and inflation was 28 per cent., Rochford district council reduced its rate by 7 per cent.
During the past nine years, Rochford's rates have risen by 52 per cent. while the retail price index has risen by 170 per cent. That has been achieved by effective use of balances and capital receipts and by identifying long-term savings well in advance so that they could be realised and taken into account. Auditors' reports on Rochford show that, in almost every area, its spending is lower than the spending of other councils in the same family of district councils.
At a council meeting before Christmas and before the RSG settlements were known, the council proposed to increase its rates, for two reasons. First, it proposed to increase them by 5 per cent. to allow for inflation and, secondly, by 7 per cent. to allow for the expected reduction in RSG. That 7 per cent. was to take into account a transfer from central taxation to local taxation which would have to be borne by the people of Rochford. The plan to increase rates by a total of 12 per cent. would have meant that it would be the first time in the history of Rochford district council that rates had been increased in double figures.
When the RSG settlement was known, the grant was cut by 19 per cent. more than the council officers and councillors had expected. There had been a major cut of £263,000. That might not appear to be a great deal of money compared with the money referred to by the hon.

Member for Newham, North-West (Mr. Banks), but it is a great deal of money for a small council like Rochford. The cut meant that the rate had to be increased by 24 per cent., and we must bear in mind that the highest previous increase during the past nine years had been 9 per cent.
If we look back, the block grant from central Government to Rochford district council in the four years to 1984 actually paid for 44 per cent. of the council's revenue expenditure; last year, it paid for 36 per cent., and this year it will pay for 26 per cent. There has been a major cut in the financing for Rochford from central Government.
The 24 per cent. rate increase that is now a possibility in Rochford—although we hope that it can somehow be avoided—will come about despite Rochford spending in line with Government targets and no grant penalty being incurred. Rochford will have to increase its rates because it has followed and adhered to all the guidelines set by the Government.
One has to ask what the reasons are for that. We are told that one reason is that the method of grant distribution has been amended and that Rochford's GREA has been reduced by 3 per cent. in 1985–86 even though nationally GREA has been increased by 6 per cent. We all know that GREA is calculated on a variety of factors—the number of people in an area, the physical features, the cost of providing services, social and environmental problems and recreational requirements. Of those factors, the number of people in Rochford has increased, the physical features have not changed, the cost of providing services has risen in line with the rate of inflation, the social and environmental problems have got no less, and recreational requirements are ever increasing as people expect more to fill their leisure time.
Why is Rochford facing such a cut? I do not understand it, Rochford district council and its officers do not understand it, and I have no doubt that the people of Rochford do not understand it.
The second reason we are given for the cut is that there is a change in the calculation. I must tell my right hon. Friend that there is no change in the income of the Rochford ratepayers, nor in the services that they expect. I want to draw his attention to the shire areas, counties and districts that will receive a lower share of the grant. That appears to be inconsistent with my right hon. Friend's claim that the shire areas will be treated better.
When we asked the Department of the Environment to give reasons for the cut in Rochford's allocation, it said:
The main reason for the loss of GRE for recreation is a major change in the methodology"—
a lovely word—
designed to take account of the differential use of recreational facilities by different groups in the population, the demands placed on city centres and resorts by commuters and visitors.
Rochford prides itself on its recreational facilities, and it has a right to the same recreational facilities as any other district council.
I wonder whether the Department has looked at its map and realised that Rochford is adjacent to Southend—only half a dozen miles away. Many of the summer visitors to Southend use Rochford's recreational facilities, as do Southend's residents.
I want to ask my right hon. Friend a few questions. Is he aware that the Association of District Councils estimates that, as a result of the RSG calculation, 231


district councils will have to increase their rates by more than 10 per cent., 67 by more than 20 per cent.—that includes Rochford—and 18 by more than 30 per cent.
Does my right hon. Friend accept that a 24 per cent. increase in the district rate is acceptable and that an authority making such an increase is not necessarily being irresponsible? What advice does he give to a local authority that has met every one of the Government's requirements, yet finds itself in the same position as those councils that have ignored them? I echo the comments of my hon. Friends the Members for Davyhulme (Mr. Churchill) and for Sevenoaks (Mr. Wolfson) on that point.
My hon. Friend the Member for Devizes (Mr. Morrison) asked what guarantees there were for 1986–87. If Rochford exhausts its balances or reduces its services, what assurances are there that next year a further adjustment in the methodology will not occur that will once again disadvantage Rochford? I hope that my right hon. Friend will accept that the rate support grant calculations are so complex that few people understand them. We had budgets that were replaced with GRE, we have GRE that is qualified by targets, and the Government choose the figure, the title, the word or the set of circumstances that best suit their purpose.
District councils do not know where they are. They cannot plan for the future. They are in the frustrated state of not knowing how to establish or to begin a three-year, let alone a five-year, plan. I believe that as a result of these complications, people will begin to reject local democracy because they reject that which they they cannot understand. Local democracy is now in the first stage of being rejected. To a large extent, it is being ignored, as the hon. Member for Newham, North-West pointed out. That is shown by the low turnout at local elections.
I fear that it will not be long before local democracy moves from being ignored to being rejected, and that would be a dangerous precedent for democracy both for the country and for this place. I ask my right hon. Friend to attempt to simplify the whole of the structure that finances local government.
I regret that it is unlikely that I shall be supporting the Government tonight. If the Minister's reply persuades me, I shall be happy to support them, but, as things stand, it is unlikely that I shall support the Government.
I ask the Secretary of State, in the short term, to review the system and its injustices, and in particular to review Rochford's case. In the medium term, will he abolish the current incomprehensible rate support grant calculations and replace them with a simpler system that facilitates long-term planning, demonstrates fairness and, above all, encourages understanding of and support for local democracy?

8 pm

Mr. Simon Hughes: It is notable that, one after another, year in and year out, Government Back Benchers, make the same claims and ask their Government to try to do something about local government finance and to deliver that which clearly has not been delivered in the past.
My hon. Friend the Member for Isle of Wight (Mr. Ross) took his place in the Chamber a few minutes ago. He has been a Member for 11 years and within seconds of arriving in the Chamber tonight he said, "We hear the

same speeches every year." That is evidence that it is about time that the Government did something. Promises, words and hopes for the future are not enough.
Exactly 51 weeks ago today the House was asked to consider the Government's proposals for the current financial year's rate support grant settlement. The Government were under enormous pressure, particularly from their own Back Benchers. They were under even more pressure than they are today.
The Government were repeatedly told that low-spending authorities were not able to spend what they needed to spend without penalties because their targets were below the Government's declared expenditure. On that occasion, the Secretary of State laid great store by two matters. The first was the efficiency and accountability of local government. I have no doubt that the phrase "the magic of the market place" was in his mind, although not uttered. In that context he praised the Audit Commission's work.
The second was the effect of the Rates Act, implemented late last year. The Secretary of Stare did not concede that the system was ramshackle and needed to be replaced. He simply said that he would try to reward the low spenders.
Those of us who live in high-spending authority areas—because they have high need levels—thought that it was a simple, political buying-off operation. We thought that we were witnessing a crude political device to buy support in the Lobby. The Secretary of State succeeded to some extent by persuading some of his colleagues not to vote against him, but to abstain, so he reduced the number who voted against the order.
Unfortunately, logic and the Chancellor of the Exchequer have made it impossible for the Secretary of State to fulfil his promise. Public expenditure levels have been set and the Chancellor has said that in real terms this year local government expenditure will be cut by 3 per cent. We protest about that.
If the Secretary of State was to do what he promised and give low spenders the benefit of low spending for this year, he had to fiddle with the arbitrary targets and arbitrary penalties for the high-spending authorities with the biggest needs. Unfortunately, he failed on both counts. He is still being criticised by his back benchers who say that the system is still inadequate and has not met their needs. Essex is a good example of a Tory-controlled shire county. The urban areas are equally unhappy, not least because they have been rate-capped.
The hon. Member for Davyhulme (Mr. Churchill), who represents the area covered by the Tory-controlled Trafford authority in Greater Manchester, makes it clear that the system has not worked. That is because in theory the system is fundamentally flawed and in practice hopeless—and it is becoming worse.
Since last January, 51 weeks ago, there has been a 3 per cent. cut in central Government's contribution to local government expenditure. The much-lauded Audit Commission produced a stinging report in August which said that the system was responsible for adding £1,200 million to the rates bill. The Government were so sure of their ground that the Secretary of State's response was that the Government would not examine the report in detail. The Secretary of State praised the Commission last January and now hides from its conclusions.
Under the Rates Act, for the 18 rate-capped authorities—16 Labour-controlled, one hung and one, Portsmouth,


Conservative-controlled—the squeeze comes from both ends. The Government's contribution to them is being reduced but they are told that they cannot raise the money by putting up rates because that is illegal and such rates would be invalid. They cannot meet their expenditure requirements.
Many obligations imposed upon such authorities are statutory. The Government do not now even believe in accountability. In the context of education, they say that people should be allowed to vote with their feet and take their children out of school A into school B. They say that that is the principle of the market economy. The Government do not apply that principle to local government. They do not say that the results of local elections should be determinative. They do not think that locally elected councillors, many of whom are members of the Conservative party, should be able to make ultimate decisions.
The only ray of light is that at the Tory party conference last year we were assured again — 10 years on—that there would be consultation about reform of local government finance. We welcome that, provided it produces results.
Consultations were referred to by the Minister for Local Government in Committee recently. I hope that the consultations that he offered the hon. Member for Copeland (Dr. Cunningham) and the Labour party will be offered to all other party spokesmen in the House.
Our view does not parallel that of the Labour party. We do not believe that the problems of local government will be solved by increasingly funding local government from central Government through block grants. We believe that local government should be made more accountable. That means reducing the money that comes from central Government and raising more money locally. As my hon. Friend the Member for Woolwich (Mr. Cartwright) said, that means local income tax in addition to rates.
We have to have reform to make local government more accountable. I hope that real progress will be made before next year and that we shall not have to listen to ever more plaintive cries from more and more hon. Members.
The only way open to people outside the House who want to protest is to vote against the Government at every opportunity. They will have that opportunity this May in the shire county elections and next May in the London borough elections. I hope that in their thousands they will vote against this ridiculous imposition of central Government policy on their local councils by their Conservative Government and reject them and all their works.
The Guardian yesterday made it clear that the local authority settlement that we are being asked to approve tonight threatens to cause big rate increases in most of the Tory counties only a month before they go to the polls in the four-yearly county elections. It says that, unless the councils are able to raise their balances, they will be forced to raise rates significantly higher than inflation, even if they keep fairly constant in real terms.
The effect will be even more severe in the districts, as the hon. Member for Rochford (Dr. Clark) said. A whole list of counties will be affected — Berkshire, East Sussex, Essex, Gloucestershire, Hampshire, Hertfordshire, Surrey, Warwickshire, West Sussex and Wiltshire. I quoted the example of Warwickshire last year

when it said that it had done everything possible but still could not meet the targets. That is still its position. It also applies to other Labour, Tory and Liberal-controlled county councils.
We have heard that, except for Bedfordshire, all the shire counties have targets below GREA. Avon, a Labour-controlled council, has reached the stage at which, because its GREA is £6 million higher than its target, it would incur a penalty of £18 million if it spent up to its GREA. I was told that the people of that area are saying that they must empty the cocoa tins and use all possible reserves to avoid cutting services. Allowing even for that, because of Government policy, next year it will need a 19p rate increase if the system is not altered.
My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) has received a letter from the chief executive of Northumberland county council, sent with the approval of the political leaders of that area. In that Labour-controlled council—just: it has a majority of one—the settlement continues to be poor; it follows a series of poor settlements for that area. The letter to my hon. Friend points out that the Government make insufficient allowance for inflation, continue their policy of transferring the burden from the taxpayer to the ratepayer and impose policies the implications of which are that if the council was able to contain its spending to last year's level, allowing for the Government's assessment of inflation, the authority would receive £5 million less in grant in the coming year than it received last year, which would represent a 10 per cent. reduction. In fact, it would be much worse because of pay settlements, which would mean the authority losing £7·5 million more.
There is insufficient assessment of the needs of such counties, which have huge rural areas. In Northumberland's case, it has been greatly depopulated, particularly for educational assessment purposes. It is clear that the Government's calculations do not work. Northumberland has had to reduce highways manual staff from 580 10 years ago to 307 and has had to reduce the number of teachers from more than 3,000 to 2,500. It cannot do more.
Northumberland, looking at the whole situation from a different perspective from, say, the Isle of Wight, says that, while it might do well out of a particular alteration —in Northumberland's case, the changes in rules about transport grant benefit the authority, whereas the Isle of Wight does badly out of that alteration—nobody wants a system under which proper assessments cannot be made because one decision goes in their favour and the next goes against them. They do not know where they are.
Northumberland serves also to illustrate an important constitutional point. It says that the effect of Government policies is driving out the people who were in control of the area — the same applies in other areas — the moderates in the Labour party, to be replaced by extremists. In other words, the Government are forcing people to take extreme positions by making extreme proposals, and that cannot be good for the future of local government.
The Isle of Wight, on all definitions, has been a low-spending authority. It has been Liberal-controlled for a long time and, I hope, will remain so for even longer. It cannot begin to do what the Government expect of it. The Isle of Wight has probably the highest percentage of population over pensionable age, plus 17 per cent. unemployment. It is told, nevertheless, that it cannot even


have the money that is needed to carry out a fundamental service such as providing facilities for the disposal of waste. All the holes in the Isle of Wight where waste could be deposited have been filled, and the authority is not being given the money to put the waste elsewhere. What is it supposed to do, remembering that the disposal of waste is a statutory duty?
Further, the Isle of Wight wants to deal with its unemployment problem, but instead of being allowed the money to buy land to develop for industrial purposes, it is not even given central Government assistance by way of area status. The Isle of Wight is in a hopeless position, all because of the Government's policies. There should be no friends of the Government in that island.
I could go on giving examples. Consider Bedfordshire, which is having to reduce the number of old people's homes and even police overtime; this Government of law and order are forcing their colleagues in Bedfordshire to cut the services of law and order.
In Cheshire, a hung council, for the first time in 93 years the Tories cannot produce a budget. They say that they could make savings of £12 million to meet the Government's requirements, yet they are not producing a budget. Thus, not just Labour and Liberal authorities, but the Government's supporters too, are in difficulties. In other words, Cheshire's example shows that local Tories cannot cope and take the strain.
Cambridgeshire is likely to incur a penalty of £19 million. Things got so bad in Somerset that the Tory education sub-committee proposed making a charge on youngsters for the water they consumed while eating packed lunches. The full committee rejected that idea, but the council did decide that the local authority could not afford to buy any fiction for local libraries. Perhaps one can say that the facts are so appalling that to add fiction would be a distraction.
The shire counties are in a desperate position, but the urban areas are in an even worse state. I made the point earlier that the distribution of block grant means that London has had a reduction of 1 per cent., even though GREAs have been increased, that many London authorities will not be able to meet their targets and that the penalties for overspending are being increased enormously.
In Southwark, the method of calculating GREA for the social services is inadequate. It does not reflect changes in the needs of the population. We have one of the highest calls for social services in the country and, of the 12 inner London boroughs, we are first in the list with the largest number of blind, deaf, and handicapped people; we are fourth highest in the number of social workers; we are top of the league in the number of elderly; third in the number of young people who are handicapped and in care; fourth in the number of mentally handicapped; and second in the number of children boarded out in care.
Only about two thirds of those factors are recognised by the Government. The GREA data for social services are out of date, too few factors are taken into account and simple population figures dominate the assessment of social service needs, leaving out the social isolation of people—for example, the elderly are not taken into account—with the population at risk not being sufficiently considered. I understand that next year the Government are to set up a working group of officers of

local authorities and the Department of the Environment. I hope that something will be done to meet the needs of the social services.
The Government promised to do something last year and they have failed to deliver. They have not rewarded prudence—Conservative Members are telling them that—and they have not made an objectively accurate assessment of profligacy. They have misjudged. Some councils, however hard they try, will not be able to preserve essential services within the financial constraints, the straitjacket, that the Government are imposing on them. The Government will have to concede that people may be forced into breaking the law. Unless there is a realistic concession that adapts policies to people's needs—not formulae from Marsham street—the Government will be running themselves and local government into disrepute.

Mr. Stephen Ross: Is my hon. Friend aware of another problem that is looming up fast? I refer to the White Paper on buses, remembering that we have been promised a Bill a fortnight from now. Evidence from Kent county council is being taken tonight by the Select Committee on Transport. It is reckoned that what is proposed in that Bill will cost that authority an additional £2·5 million, which will immediately put it into penalty, in that it will not be able to meet that expenditure without going into penalty.

Mr. Hughes: My hon. Friend reiterates the point that we are making constantly. It is that the Government must say, "Enough of the old system." If we in this House insist on imposing duties on local government—for example, relating to buses—we must at least compensate local government. Authorities cannot be expected to provide local services without the necessary resources. Central Government hold the purse strings. If local authorities are not permitted to raise money elsewhere, they cannot be expected to find the cash out of the air. Conservative Members are fond of telling people that money does not grow on trees.
I urge the Government to think again. I warn them that, if they do not, the electors will go on voting even more consistently against them at local elections and will increasingly withhold their support, even in the traditionally Tory shire counties, which are becoming less and less traditionally Tory. Until the Government return to what we were led to believe were traditional Conservative views, and lay off local government—returning accountability to local government—they will find resistance in Parliament to this and all similar measures.

Mr. Richard Holt: I tried to make an intervention this afternoon during the speech of my right hon. Friend the Secretary of State for the Environment. My right hon. Friend did not allow me to intervene, so I shall make a speech instead.
Many of us have been concerned recently about surrogate motherhood. The issue has not crept up suddenly on the House, but it is with us. The Government have formulated no policies or plans to deal with it. The same can be said of local government. Local government issues are creeping up on central Government and they are not making proper plans to ensure that the type of scaremongering that is indulged in by the hon. Member for


Newham, North-West (Mr. Banks) is treated in the way that it deserves. I notice that the hon. Gentleman has had the good grace to make his speech and leave the Chamber. He seems always to fail to listen to those who speak after him. I always thought that it was a tradition of the House to remain in one's place to listen to succeeding speeches. Of course, the hon. Gentleman is not a traditionalist. Indeed, he seeks to abolish this establishment altogether—[Interruption.] If any Opposition Member wants to intervene, I shall be glad to let him do so.
I was first elected to local government 22 years ago, and much of what I have listened to so far has caused me a sense of déjà vu. However, I must compliment my right hon. Friend the Member for Guildford (Mr. Howell), who made an excellent contribution, as did several of my hon. Friends subsequently. I have been disappointed by the contributions of Opposition Members, especially by that of the hon. Member for Southwark and Bermondsey (Mr. Hughes), who spoke on behalf of the Liberal party. The hon. Gentleman talked about local income tax as though it were a wonderful panacea and a workable solution. That must be a broad-brush strategy, and I invite the Liberal party to address itself to the attendant detail.
The Conservative party has been giving local income tax considerable thought for a long time and it is clear that there are many questions to be asked. For example, who will pay the local tax? Will it be paid by the unemployed man or old lady? Will it be received by a head office or at the place where we happen to live or in which we work? Where will a travelling seaman pay his local income tax? If local income tax is the best policy that the Liberal party has to offer for reforming our rates—it is the only one that it has produced this evening—it is clear that it has nothing to offer that will be meaningful in future.

Mr. Simon Hughes: The hon. Gentleman may not know that for many years the Liberal party has been putting forward detailed proposals for local income tax. I assure him that we are ensuring that our proposals are brought up to date and made even better in time for the next general election. The hon. Gentleman will be able to pass judgment upon them when they are placed before the electorate.

Mr. Holt: I am grateful to the hon. Gentleman, but I have not been much encouraged by his intervention. It was a bit of flannel to cover up the fact that the Liberal party has been rumbled.
I think that most hon. Members will agree that GRE is a lottery. Several of my colleagues have already drawn attention to the way in which it is formulated. I doubt whether many members of the general public have delved into the White Paper for the purpose of bringing out some of the statistics with which local government is expected to grapple and to understand. I was a councillor for 22 years, and I never understood exactly how local government was financed.

Mr. George Park: Huh!

Mr. Holt: I doubt whether many Members of this place including the hon. Member for Coventry, North-East (Mr. Park), ever understood how it was done.

Mr. Park: Perhaps the hon. Gentleman does not know

that I was the chairman of a local government finance committee for many years. I thought that I understood how local government was financed. That is why I said, "Huh!"

Mr. Holt: The hon. Gentleman may think that he understood it. As he was a Labour chairman of a finance committee, that suggests to me that he did not. No Labour chairman understands financing fully.
I shall refer to the details under which we are supposed to work. This is what prompted me to try to intervene during the speech of my right hon. Friend the Secretary of State. As I have said, he refused to allow me to do so. I think that many members of the general public would be thrown into a sense of wonderment if they knew the details with which councillors and hon. Members have to grapple when dealing with GRE.
I do not know—I am willing to allow my right hon. Friend the Minister to intervene to explain this to me—whether the Treasury sets a global figure for all time and whether everyone within the Department of the Environment has to work within that constraining figure. Alternatively, is someone confronted with all the statistics and indices which are contained in the White Paper and required to work with them carefully and diligently in coming to a conclusion? There is every chance that the person who does that will find that he has overshot the Treasury target by several thousand millions of pounds.
The hon. Member for Southwark and Bermondsey referred to the figures in the White Paper and said that there were too few of a fine-tuning nature. An example of detail is to be found on page 66 where, under the heading,
Children aged 5–17—factor for residential care",
We are told that
(X6) is calculated as the number of children aged 5–17 in the area of the authority, multiplied by the sum of the factors below:
(i) a constant of-0·0033014;
(ii) Indicator X4 as defined above, multiplied by 0·000028512;
(iii) Indicator X5 as defined above, multiplied by -0·000016818;
(iv) the proportion of children aged 5–17 in households that contain a lone-parent family as estimated by the Secretary of State on the basis of the 1981 Census, multiplied by 0·04786."

Mr. John Wilkinson: Is that why my local ratepayers are facing a rate increase of up to 42 per cent. this year?

Mr. Holt: I am not qualified to answer my hon. Friend's question. However, if those who are setting the rate within my hon. Friend's constituency even understand the formulae, they are doing extremely well. That is only one of the marvellous elements which, when combined, produce GRE at the end of the day.
We are told at the beginning of annex K that GREs have been calculated by means of
a formula which is a development of that used for
previous years. However, the marginal indicators are minus 0·000 something. What happens if the sum total overshoots or undershoots the Treasury target? Does someone have to revise the noughts, the pluses, the minuses and the indices so that local government can understand exactly what is happening? It would not be too bad if these nonsensical figures were themselves understood to be of relevance in assessing rates in a local area. They do not take sufficient notice of whether an area is in the north or the south.
Another interesting section is to be found on page 55. B12 is followed by the heading
Weather adjustment factor for road maintenance".
The first subsection states:
the annual average number of days of snow-lying during 1979/80 to 1981/82 as estimated by the Secretary of State for Transport, multiplied by 7·10522.
That is followed by
the annual average number of days of frost during 1979–80 to 1981–82 as estimated by the Secretary of State for Transport, multiplied by 0·77115.
That is the road/weather adjustment factor for maintenance purposes that is supplied by the GRE assessors for local government departments.

Mr. Terry Dicks: Does my hon. Friend agree that the scheme or system was invented by idiots and applied by fools for the benefit of no one in particular?

Mr. Holt: I suggest that I am not qualified to answer my hon. Friend's question. That is an issue on which everyone should make up his own mind. A factor in which we are all interested is unemployment. C9, which is headed "Total unemployment", states:
The number of persons who were in receipt of unemployment benefit at May 1984 as estimated by the Secretary of State on the basis of information supplied to him by the Secretary of State for Employment.
There is no factorising there. No account is taken of whether unemployment is long-term, short-term, medium-term or permanent. That is one more example of the calculative methods by which GRE is put together.
I do not feel sorry for my colleagues on the Government Front Bench, for they are big enough to look after themselves. I am not sorry for Opposition Members, because I do not have much time for the majority of them in any event. I feel sorry for the civil servants. They must work with and understand these methods. I do not know how they cope with the mass of figures which no one else understands.

Mr. Simon Hughes: Does the hon. Gentleman accept that if this system has become the law of the land, one should not have any sympathy with the civil servants? They obviously are the power in the land, because they have in their captivity all those who do not understand the system. They will not let those people be free, so they must struggle out. The sympathy of the good Conservative Members behind the hon. Gentleman for the people who may well be the GRE assessors is probably a little out of place. We should have more sympathy for the rest of the people, who are their prisoners for a long time.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the House that Mr. Speaker appealed for brevity. Interventions make speeches even longer. A number of hon. Members are still waiting to catch my eye.

Mr. Holt: I accept your stricture, Mr. Deputy Speaker.
I come to the real reason why I wished to intervene in this debate. We have had all the fine tuning and figures. This morning I recevied a missive from Cleveland county council. There are six Members of Parliament from Cleveland, five of them Socialists. Not one of the five Socialists has been in the Chamber at any time during the debate. Perhaps that reflects the fact that the Tory party is to take over in Cleveland shortly and the Labour party has already washed its hands of it.
That is possibly why I received that missive, which asked me whether I would draw to the attention of the

Secretary of State the fact that Cleveland was upset, not by the GREA machinations, but by the fact tha: between last year and this year, according to the civil servants who do not make the mistakes to which the hon. Member for Southwark and Bermondsey referred, the county of Cleveland has shrunk. It may well be that the population has moved, but it takes some believing to accept that a geographical land mass change is sufficient reason to justify an alteration in GREA.
The letter from the chief executive of Cleveland county council stated:
The error has been pointed out to the Department of the Environment. The Department accept that the area used is wrong".

Mr. Wilkinson: Coastal erosion.

Mr. Holt: There is a little, but not that much. The Department is using a different ordnance survey from the one used last year. The result is that £221,000 has been wiped off from Cleveland's GREA. The Cleveland council is a profligate Labour-controlled authority, and I have little brief for that body in that respect. The council is, however, entitled at least to the honest effects of the rules as long as those rules exist.
My right hon. Friend the Secretary of State is to move the GREA and the grants, but he is moving the goal posts by changing the land mass area of Cleveland during the 12 months. Worse still, having admitted the error, the Department is not prepared to correct it until some time in the future. Because of a simple error by the Department of the Environment, every ratepayer in Cleveland will have to pay extra next year. I hope that, if nothing else comes from the debate today, my right hon. Friend will take on board the need for something which is so complex and misunderstood as the current system to be urgently reviewed. I shall vote with the Government, but I shall do so out of loyalty and not conviction. Next time, I might change my mind.

Mr. Stan Thorne: A number of hon. Members have said that they served their apprenticeship in local government, and I am no exception. During the 1960s and early 1970s, there was some concern about the services that local authorities were providing. Looking at the services provided by local authorities attempting to meet social needs—whether in social services, housing or education—one must feel that councillors taking on the responsibility of local government do so with a definite commitment. As the hon. Member for Langbaurgh (Mr. Holt) attempted to suggest, councillors may have had an education that is not adequate to equip them to deal with the responsibility of local government in terms of finance and so on, and that is understandable. The Labour and Conservative parties have failed to give the type of training and skills to our local councillors that should have been provided. Generally, councillors attempt to meet their responsibilities and commitments. They do so not lightly, but in their determination to oppose cuts in services that are not in accordance with their views on what local authorities should be providing.
The Government are changing the word "needs" to "targets". Those targets are to be determined by central Government, thereby reducing local authorities to mere instruments of Government policy. It is no wonder that the Government see elections in Greater London as


superfluous. Local government is a major aspect of our form of democracy. I use the word "democracy" with some trepidation, because it is almost non-existent in Britain today.
The rate support grant measures, far from protecting ratepayers, will mean cuts in jobs and services. Certain jargon appears to be relevant these days when debating expenditure by local government. Reference is made to low and high-spending authorities. It is fairly clear, especially when listening to Conservative Members, that low-spending authorities are apparently responsible bodies according to the Government's Victorian values. The Secretary of State or other Ministers have given no specific examples of what irresponsible spending is. Is it irresponsible to provide bus passes for the elderly, old people's homes, sheltered accommodation, community centres for young people, meals on wheels, and nursery facilities and to adapt property for disabled people in need? We in Lancashire seek to meet those needs as far as we are able, given the resources available to us.
The rate support grant in Lancashire will be £24 million less than if the current year's percentage had been maintained. That is equivalent to a precept of 17p in the pound. Grant penalties could ensue to the county council if it spends up to the Government's GRE formula, as my hon. Friend the Member for Burnley (Mr. Pike) said. The penalties would have to be met from the rates. Some local authorities may find it acceptable to reduce services and to create further unemployment, but they have a responsibility to defend the interests of their local residents. The statutory political and moral obligations of local authorities are held by many local Labour councillors as serious responsibilities to uphold, and rightly so. To protect the elderly, the sick, the young and the disabled is the responsibility of local authorities. Many of them will not accept the Government's clear dictates directed towards ignoring those responsibilities. In essence, local authorities are asked to collect more in rates and to provide fewer services.
Yesterday we debated unemployment. Today we do not hear from the Government how they intend to reduce unemployment; we hear the direct opposite. An increase in unemployment of between 70,000 and 80,000 will be the product of the Government's rate support grant proposals. The Government have been trying to get across the idea that they care about unemployment, but this measure proves beyond doubt that unemployment is an instrument of economic control for the Government to which they are fully committed. The people of Britain may appear to be slow to grasp that fundamental point, but I am convinced that unemployment will yet be the basis of the Government's ultimate downfall.

Mr. Warren Hawksley: I do not wish to follow the line of the hon. Member for Preston (Mr. Thorne); I wish to be unashamedly parochial. Most speakers have been parochial today and that is right on an occasion such as this. I also hope to be brief, but as I served on a county council for 12 years, I think that I can offer some explanation of why Shropshire county council feels bitter about the way that it has been treated under the orders that we are discussing.
I served for four years as chairman of Shropshire county council's general purposes sub-committee. During that period it was a responsible authority. During the period of the previous Labour Government when the IMF had to come in and bail them out and we saw even greater public expenditure cuts than we are seeing today, Shropshire county council, then a Conservative-controlled authority, responded to the Government's demands and cut its expenditure in line with Government requests. Ever since, Shropshire county council has responded to the needs and requests of Government, yet today it finds itself with problems. It is unfortunate that by these orders we should again appear to be hurting those authorities which have shown prudence in recent years. It is paying a heavy price for the responsibility that it has shown.
Irresponsible authorities which have occasionally spent money as if it were going out of fashion even today can possibly find room for further cuts, but responsible authorities do not have that option. By using the year that the Government use as the base for their calculations, they are creating problems for those authorities which were responsible when it was not fashionable to be so. The Government should not penalise the authorities which were good boys in those days.
The Government are right to tackle overall local government expenditure. They should not increase the total amount of local government expenditure; they should consider carefully the way in which they allocate the money that they have available.
My arguments on the rate support grant order will not be about the total amount of money available, as Members on both sides have argued. My arguments will not lead me to vote against the Government or abstain, like some of my hon. Friends. That is not because I think of the orders as great support for local government but because the Department of the Environment and the Government generally have supported Shropshire and Telford in other ways. They have supported the new town of Telford, given us a new motorway, a new hospital, regional aid and an enterprise zone, but with a 22 per cent. unemployment rate, the rate support grant should also be used to help councils in the area. It is not enough to suggest that all the other aid can, by itself, respond to our needs.
Shropshire is the fourth hardest hit of the shire counties. Its social services are running at 75 per cent. of the national norm. That has been the case for some years. We do not complain about that; we are happy to run them more cheaply than some other areas. It shows that we have tried to run local government as cheaply as we can.
Last year, as has been mentioned, we were given a pledge by the Secretary of State in the RSG debate. It is right that the House should hear the wording in which it was given. He said:
I would expect in 1985–86 and thereafter to be able to set targets which take greater account of GREs and thus recognise the efforts which low-spending authorities have made."—[Official Report, 23 January 1984; Vol. 52, c. 642.]
What has happened in Shropshire? Last year, the gap between GREA and target was 5·4 per cent. This year it is 8·9 per cent. The move has been in the wrong direction. Despite the 4·5 per cent. spoken of by the Secretary of State when he started the debate, the anomalies of the responsible low-spending authorities have not been tackled this year. I hope that when my right hon. Friend replies he will tackle the problems that will arise. Although I shall support the Government tonight, the


problems will be even greater next year if we do not have a stronger and clearer commitment than the one we had last year, so that there can be no getting out of what last year we thought was a commitment. Shropshire based its budgeting on the assumption that there would be action.

Mr. Barry Porter: I hope that my hon. Friend realises that his speech is one that I should have made if I were going to be called. If for Shropshire one reads Wirral district council, I should have made exactly the same speech. Does he accept that the only way that we will solve this ridiculous problem, whether it be in Shropshire, Cleveland or Wirral, is by a fundamental review of local government finance? If we have to go through this procedure time and time again, the Government will have to accept that those of us who are loyal to their macro-economic policy will lose patience.

Mr. Hawksley: I agree with my hon. Friend's comments, but I do not think that that is relevant to the debate today. As the Inland Revenue computer centre is in my constituency, I should encourage the idea of moving to local income tax to replace the rates. That has been advocated by other hon. Members.
About nine months ago, Shropshire county council expressed anxiety at the lack of capital for educational work. I took a delegation to my right hon. Friend the Secretary of State for Education and Science. As a result, he sent one of his officials to Shropshire to see what the position was. He reported to my right hon. Friend and as a result the capital allocation for education in Shropshire was increased from £2·1 million to £3·9 million but—this is the important point—no allowance has been made in the rate support grant for the extra revenue which is necessary to go with that capital. One Secretary of State accepts the need, so I hope that my right hon. Friend the Secretary of State for the Environment can work in tandem to provide the necessary resources. The cost to the revenue is about £250,000, which is a large sum to a small rural county. I ask the Secretary of State to repeat with greater strength the commitment that he made last year.
Problems also arise at district council level. Wrekin district council is Labour-controlled. The county council has no overall political control. The Labour authority shouts along political lines even before it is affected, made dire forecasts of its rate increase. Its target is way below its GREA, which I gather is common for district councils in areas which have new towns. I wonder whether the needs of the new town possibly throw out the GREA calculation in some way. There would seem to be the possibility of some problems in that respect. Perhaps in reply the Minister will say whether the GREA for new towns in district council areas is accurate.
Wrekin district council has suffered through the reduction in the block grant this year, but before I support its protestations I suggest that, as a fairly high spending Labour council, it should put its own house in order. I will give some examples of its expenditure. The council has a lottery in the neighbourhood which is supposed to help with, for example, appeals and social services. This year resources have been allocated from that lottery to the striking miners—of whom, I am glad to say, there are very few in Shropshire. Resources have also been allocated to the local Anti-Apartheid organisation, which does not have much relevance to the electors of the Wrekin area.
The council has a public relations department which employs three officers full time, as far as I can see, on Labour party political propaganda. Our county council, which has a budget of about £150 million, recently discussed whether it needed a public relations officer. It decided that it did not. Some of the Socialists on the county council led the attack against the proposal. The district council's budget is about one twentieth of that of the county council, yet the district council is employing three such officers. The county council reckons that the cost of a public relations officer would have been about £30,000. The district council must therefore be spending about £100,000 on political propaganda.
The district council prints a broadsheet, the "Wrekin Report", which could be produced, I should have thought, by Transport house. It has nothing to do with providing information to the electorate; it is purely and simply a political document. Until such time as the district council is prepared to cut out those frivolous expenses, my support—however hard the council has been treated under the block grant—will not go to it.
I finish where I started, by appealing to the Secretary of State to think again and to make sure that the shire counties have a better settlement, and the GREA is used as a basis for targets. The problems that the treasurer, the members of the Shropshire county council and I foresee as being even worse next year should not be allowed to develop. It is important to be fair to those authorities which have been so good over the years.

Mr. Bill Michie: I do not suppose that anything that has been said during the debate will make much difference to the outcome. However, I am amazed that from all parts of the House—from the Conservative, the Labour and the Liberal parties—there has been a very good coverage of the criticisms of GREA and the way that the rates are assessed by each county borough or county council. Although, as I have said, it will not make much difference to the outcome, surely the Minister in his reply, and in the coming months, must look seriously at the anomalies, discrepancies and injustices created by GREA throughout the country.
We all compare our own areas with similar areas. Many anomalies have appeared within the area that I represent, and they have still to be dealt with by the Government. The Minister and the Government have been asked why they have produced a rate settlement such as the one before us.
The 1985–86 GREA for Sheffield has been assessed at £187·1 million—an increase of 3·5 per cent. on 1984–85—yet the national average is 6·7 per cent. Perhaps it is thought that Sheffield does not have problems connected with unemployment, the environment or the elderly, but that is not so. Although we are to some extent getting used to the difficulties which arise from the reduction of grant from central Government, the situation is getting out of hand. The city council has been accustomed to adverse RSG settlements. It has been calculated that the combination of all overall grant reductions, cash limiting and distributional charges caused by GREA, as well as tapering and penalties, has cost the city £151 million since 1980–81—in other words, that money has been taken from the Sheffield ratepayers.
I cannot understand why Conservative Members are always criticising the high spenders when areas such as Sheffield could, if it had not been for so many penalties


and cuts, have provided the same services last year without any increase in rates. I do not think it is fair for the Minister to say that the Government are looking after the ratepayers' interests when the Government have made the position worse than it need be. Indeed, in some cases the situation would not have been at all bad. The problem seems to be related to the complications of GREA itself, as many hon. Members have said.
The Minister should endeavour to convince the House that the system is fair. In the Sheffield area, in regard to museums and arts, the GREA element is calculated according to shopping and floor space. Obviously, there is no direct relationship between the authority's function in providing museums and arts and the area of shopping floor space. Over 50 per cent. of the Sheffield GREA is calculated by reference to school pupil numbers. The calculation assumes that expenditure changes result from changes in pupil numbers occurring within 18 months. The Department of Education and Science knows and recognises that such is not the case; thus, the calculation is wrong. The cost is 10 per cent. of the education budget in Sheffield, and there is a reduction of £5·5 million in 1985–86.
With regard to education for people over 16—a statutory obligation—the GREA assessment is made by reference to the number of pupils in education at the time in question. But that is only half the calculation, because the demand for that sort of education is much higher. It is estimated that another 600 full-time places could be filled if the city council could provide the facilities. Obviously, with the present restrictions, it cannot do so. Ironically, because the places cannot be created to meet the demand, the city is penalised even further in GREA, to the tune of £1·2 million.
I should like to refer to the Library service. Everyone has libraries, but in the calculation no consideration is given to the fact that we are a major polytechnic and university city. Thousands of students who use the facilities are not brought into the calculation. I refer also to environmental health. No calculation is made of the special circumstances of industrial decline over the past 10 years. We also have problems of air, water and land pollution that are not given fair consideration when GREA is calculated. Finally, I refer to the elderly. Sheffield has one of the highest numbers of elderly of the major cities, yet that is not properly calculated for in the GREA.
Whether hon. Members vote for or against the report, the Minister must justify carrying on without taking into consideration all the points that have been made. It is hardly fair on authorities, whether they are considered good or bad, to have to struggle on year after year with this crazy system of GREA.

9 pm

Mr. Jack Straw: I thought for a moment that the hon. Member for The Wrekin (Mr. Hawksley) was going to be unique in the debate and complete a whole speech from the Conservative Benches without uttering a single word of criticism of the Government. However, he did not break ranks, as I originally thought he would. With his contribution, speeches from Conservative Back Benchers were completed with not a single Member speaking in full support of the Government. Not one Opposition Member spoke in support of the Government

either. Conservative Members will make up their minds whether to drag their feet or sit on their hands in the Chamber when we vote, but there is virtually no support on either side of the House for the settlement.
We have had some excellent speeches from the Opposition. I show no favouritism when I commend in particular my hon. Friends the Members for Burnley (Mr. Pike) and for Preston (Mr. Thorne). I note the fact that all three Labour Members representing Lancashire have spoken—or are speaking—in the debate and that not a single Conservative Member from Lancashire has even deigned to be present during a debate of critical importance for our county.
I welcome the Minister of State to what I think will be his maiden speech on the rate support grant. Perhaps this is yet another occasion on which he wishes that he was back in the calm waters of the Department of Trade and Industry or anywhere but enveloped by GREA—an animal to be found only in the zoo.
Over the past five years we have witnessed the application of an ever-tightening vice over local authorities by the Treasury and the Department of the Environment. Long-standing conventions—which were respected by both sides—governing the relationship between the Government and local authorities and operated by both parties over many decades, have been unilaterally jettisoned. The Conservative party, once the champion of local democracy and choice, has become its destroyer. Sir Winston Churchill's famous injunction to "set the people free" has been turned upon its head to "set the people free to do as this Administration tells them." Even the much more recent pledge, under which all members of the Conservative party were enjoined to roll back the frontiers of the state, has been torn up. Instead, an ever larger and more monstrous leviathan has been unleashed, in the form of the Secretary of State, the Chancellor of the Exchequer and the Prime Minister, to devour local freedoms and arrogantly and autocratically to replace the decisions of 24,000 councillors and 500 separate communities by central diktat. The haunting spectre, the nightmare raised by the present Lord Chancellor that a Government with a large majority could become an elective dictatorship has, in large part, turned into reality.
In terms of their principles and claim to be the party of freedom, the Government have extracted a heavy price from their supporters in the country for their policies towards local government. The question that many wiser counsels on the Government Benches may ask—and, I suspect, even the Secretary of State in one of his rare moments of peace—is whether all this has been worth it. What exactly has been achieved in return for the destruction of the hallowed principles, the conventions governing the relationship between the Government and local authorities, and the destruction of some ministerial reputations besides?
If there has been a major shift in power between town hall and Whitehall over the past five years, there has also been a major shift in Whitehall itself, from the headquarters of the Department of the Environment in Marsham street to the corridors of the Treasury in Great George street. Local government has been sacrificed and the Department of the Environment Ministers sometimes nearly crucified upon the alter of pseudo-monetarism. What that one true believer, the Chancellor, has asserted and will assert is that controlling the totality of local


authorities' current and capital expenditure is central and essential to the cause of the Government's economic policy.
What I have to say to the House—I address my remarks particularly to Conservative Members—is that, even within the criteria set by the Chancellor for the success of this policy, the case for controlling local authority expenditure in the present way is wholly unjustified. It is that case that I first wish to examine by reference to our own recent history and by reference to the current practice of other countries more successful than we are
Local authorities, as the Secretary of State told the House earlier today, spend £24,000 billion each year. It is a large sum, of which just under half is met by central Government and the other half from local revenue—principally the rates, charges and rents. What local authorities spend in totality is classed as public expenditure. The Pavlovian response of the Chancellor, when challenged upon this, is to say that unless all public spending is strictly controlled, the whole of the Government's economic strategy will be knocked off course.
I am self-evidently not a monetarist economist—there are very few of these, and it is an ever-diminishing breed —but, even for those who are, control of public expenditure is not an end in itself but a means to the end of controlling the things about which monetarists worry—the money supply, the public sector borrowing requirement and, they say, through both of those, the rate of inflation.
The Government's fundamental error is to believe that what local authorities spend from their own local revenue can have any significant effect upon public borrowing or through that upon the money supply, interest rates and the rate of inflation. Local authorities are not allowed by law to borrow to finance their current spending. That means that except in the most marginal and indirect way what local authorities spend out of their own current resources cannot affect the monetary aggregates upon which the Government—not we—say that their policy should be judged.
In short, the Government have made a rod for their own back by seeking to control that which there is no need directly to control, even within the terms of their own policy.

Mr. Patrick Jenkin: Perhaps I may cast the hon. Gentleman's mind back to the passage from the memoirs of Lord Barnett in which he explained that the Labour Government took a totally different view and in fact insisted on regarding local authority current spending as part of total public spending.
In those circumstances, is the hon. Gentleman now saying that the Labour Government got it all wrong and that the Opposition are going to pursue an entirely different policy?

Mr. Straw: I am happy to reply to the point raised by the Secretary of State. Indeed, I anticipated it in my speech.
There is a fundamental distinction in terms of practice between this Government and the last Labour Government, and that concerns the control that the Government are exercising. This Government have viewed all items within the public expenditure survey

operation as items which have to be directly the subject of control. I fully accept that in terms of public expenditure conventions the die was cast in 1962 when the Plowden committee recommended the present system of public expenditure survey committee. The fundamental difference is that, even though Plowden recommended, and Otto Clarke implemented, that all local authority public expenditure should be classed as public spending, initially that was only for the purposes of indicative planning by the Treasury to give it an idea of what was happening elsewhere in the economy, not for the purpose of control.
I accept that the last Labour Government introduced cash limits over their expenditure. I have no objection to that; nor do I have any objection to cash limits over rate support grant. It is the duty of any institution with responsibility for public money to ensure that it spends that money wisely and efficiently, and cash limits in my judgment are one way of ensuring this. We have never questioned—and neither did Mrs. Margaret Hodge, the leader of Islington council, who appeared recently on television, dispute—the right of central Government to close-end and cash limit what they gave to local authorities. We will argue about the amount as we are doing tonight, but none of us has said that central Government are not entitled to say, "That is the amount, and no more."

Mr. Patrick Jenkin: This is very important. The hon. Gentleman's argument simply will not wash. My quotation from Lord Barnett makes it abundantly clear that the Labour Government used the rate support grant not just to close-end the amount of Government grant to local authorities, but to reduce the percentage so as to reduce local authority current spending. I shall not read the quotation again. That is what Lord Barnett said and that is what the Labour Government were trying to do.

Mr. Straw: The Secretary of State ignores the fundamental difference in the relationship between central and local government before 1979 and now. I anticipated all those questions. Of course central Government have sought in the past and will seek in the future to influence what local authorities do, just as local government seeks to influence what central Government do, but there is a fundamental difference in terms of the democratic balance of power between seeking to influence what an institution does and seeking directly to control it. Since 1979, the Secretary of State and his predecessors have sought to break the convention that Governments should control what they give to local authorities and to seek in various ways to influence what authorities do and to say that in future central Government should wholly control all local authority spending, leaving the authorities no discretion whatever. If the Secretary of State thinks that the present system is the same as that operated by the Labour Government, he should ask the local authorities themselves. Conservative and Labour-controlled authorities and the Association of County Councils will tell him that there has been a fundamental change and that they want the old system back.

Mr. Norman Atkinson: The Government, and especially the present Secretary of State, have said that they have no objection to local authorities selling off their assets to fund their services so long as they pay their penalty to the Government. The Government deserve even


more condemnation if they are not just seeking to control local authority expenditure with certain qualifications but actually encouraging local authorities to do their own asset stripping to fund their services.

Mr. Patrick Jenkin: I did not say that.

Mr. Straw: My hon. Friend the Member for Tottenham (Mr. Atkinson) is quite right. There are all kinds of anomalies, even in the present public expenditure conventions.
We must deal with the fundamental argument here. I have taken part in more debates on this than I care to recall. The Secretary of State has constantly claimed that local government expenditure is part of public expenditure and must therefore be controlled in totality, but he has never answered our point, with which some Conservative Back Benchers agree, that what local authorities spend out of current resources does not and cannot affect the things that the Government regard as the test of their economic policy—the money supply, the public sector borrowing requirement and interest rates.
It is essential that the Government address themselves to that point. Let them consider the example of other countries. The United States and West Germany have both to some extent been following monetarist policies—certainly until 1982 in the United States, and until now in West Germany. Both those countries are more successful than ours, but neither seeks centrally to control local authority expenditure. The Secretary of State may argue that they are federal countries. Constitutionally that is so, but they are as unitary in economic terms as this country. If they do not find it necessary to control local authority expenditure but still have more successful economies than ours, why is such control so necessary here?
Ten years ago, the Prime Minister, when she was the Shadow Environment spokesman, promised to abolish domestic rates. That promise was repeated in the 1979 Conservative manifesto. Worn down by utter failure in that respect, the Prime Minister has sentenced the Minister for Local Government to the purgatory of seeking to redeem her pledges. If he succeeds, no doubt the right hon. Lady will claim the credit. If he fails, his efforts to reach the Cabinet Room will be thwarted—at least under the present Prime Minister.
After four major Acts, GREAs, targets, rate-capping and endless Green and White Papers, we are now to have a fundamental review of local government finances. We wish the Minister nothing but well, and look forward to the results. However, unless the review addresses the central economic question, it will not lead to the removal of the fetters on local democracy, which Conservative councillors seek as ardently as do the Opposition.
The Minister must not deceive himself into believing that there is a middle way. The hon. Member for The Wrekin and the Association of County Councils have suggested that the local authorities' tax base should be broadened to include a local income or sales tax and that the central Government grant should be correspondingly reduced from half—as it is today—to, say, a quarter. In fact, the broadening of the local government tax base would not make the slightest difference to the Treasury's present case for controlling every penny spent by local government. The Treasury and the Chancellor wrongly, but powerfully, believe that every pound of local

government expenditure must be controlled by the state, whatever its source. The proof of that lies in the fact that, contrary to the conventional wisdom of Layfield and many others, control has increased as the contribution of central Government has decreased.
Central Government's control is greatest where its contribution is tiniest. Central Government now seeks control of the total expenditure of Islington, Camden, the GLC and ILEA, while those authorities have received not a penny from central Government or from the Treasury.
If the Minister is to spring out of the trap in which he and the local authorities are currently imprisoned, he must first fundamentally challenge the accounting conventions which are the gaoler. It is often assumed that those conventions are God-given, permanent and value-free. They are not. They are man-made and politically weighted, and they can be changed.
The Secretary of State referred to the example of the Labour Government. In 1976, the present right hon. Member for Glasgow, Hillhead (Mr. Jenkins), a member of that Government, made a speech in Llangefni in which he said that with public expenditure crossing the boundary of 60 per cent. we were close to the frontiers of social democracy. Six months later the Treasury reworked the conventions, and it appeared that public spending was not 60 per cent. but 47 per cent.

Mr. David Howell: The hon. Gentleman says that the convention that all local authority spending should be controlled is man-made. Would he agree that the conventions were established by the Labour Government in 1976?

Mr. Straw: Perhaps the right hon. Gentleman was not present during my exchanges with the Secretary of State at the beginning of my speech. As I have said, there is a fundamental distinction between the practice of previous Governments of both major parties, who sought to influence the level of local government expenditure, and the practice of the present Government. If I seek to influence an institution, I respect its right to do something different if it disagrees with me. That principle is fundamental to the democratic balance. The present Government seek to control local authorities and, in doing so, to take away their democratic rights altogether.
In short, there is no economic justification for this monstrous system of controls. However, the system is doubly damned because it has not even worked out as Ministers intended. Ministers have claimed to be anxious about rate increases, but their policies have led directly to rate rises which have been far faster than the general rate of inflation. No doubt the Minister for Local Government will rattle through a list of figures showing how, year by year, the rate of increase in rates has declined. He will not say, however, that, year by year, rate rises have been far higher than the rate of inflation. Since 1978–79, rates have increased by 141 per cent., whereas prices have risen by 50 per cent. The Tory-dominated Association of County Councils has said that the reason for the increase in rates above the rate of inflation is the direct responsibility of the Government in cutting grant.
We must also consider the fairness of the system. The ACC has damned the settlement, complaining that it is the most complex ever in a system that is renowned for its complexity. It has challenged the Under-Secretary of State for the Environment, who prayed the ACC in aid in favour


of reducing grant. The Government will seek any alibi. So incensed was Mr. John Lovill who, as far as I know, is not known to be a rabid Socialist, by what the Under-Secretary of State said, that the ACC wrote to him saying that it was quite untrue that it supported such a reduction in the level of rate support grant and that it was unacceptable when accompanied by constant accusations of local authority overspending and a refusal to allow the deficiency in income to be made good from other sources.
The inequity, unfairness and sheer insanity of the present system derives from the ever more frenetic efforts of Ministers to second and third-guess decisions which should sensibly be left with councillors. It also derives from their trying to substitute bizarre mathematical formulae for individual judgments, as the hon. Member for Langbaurgh (Mr. Holt) said. He should know because I understand that he used to be in the bookmaking industry, as it is delicately described, before coming to the House. It is ironic that the modern, extremist Conservative party has become the arch practitioner of rigid central planning and control. It is ironic that, while we are opening our ears to the need for greater decentralisation and more local sensitivity, the Conservative party is closing its ears. It is extraordinary that the Conservative party, above all, should have ignored the warnings of Karl Popper—that although it is possible to centralise power, it is not possible to centralise the knowledge needed to exercise that power widely. Popper, drawing on the Tories' favourite guru, Hayek, said of the central planner:
Unable to ascertain what is in the minds of so many individuals, he must try to simplify his problems by eliminating individual differences…But this attempt to exercise power over minds must destroy the last possibility of finding out what people really think…Ultimately, it must destroy knowledge; and the greater the gain in power, the greater will be the loss of knowledge.
As much of what is intellectually respectable among modern Right-wing Conservatism derives from Popper and Hayek, it is time that some Conservative Members took notice of their philosophies.
Virtually every social and economic need from the cradle to the grave is now measured by GREA, but so detached have Ministers become that even the apparently simple issue of the demand for cemeteries and crematoria has not been measured, until this year, by reference to the number of people who are expected to die but by the number of people who are expected to go on living. It took the local authority associations four years to persuade the Department of the Environment—the hon. Member for Langbaurgh will know that this is the E8 factor—that a better measure of the demand for cemeteries and crematoria, far from being the number of people who are likely to carry on living, is the number of people who are likely to die. It is no wonder that we are in a mess.
GREA is bad enough, but now, quite contrary to the undertakings that have been given, it is used not merely to allocate grant but as a means of control. In addition, we have target, which is based on separate yardsticks and is inconsistent and in conflict with GREAs. One measure tells authorities what they need to spend and the other tells them what they will be allowed to spend. Of the 39 shire counties, 38 find that their target is below their GREA and that they will therefore be penalised heavily by the Government if they do no more than spend the Government's own assessment of their needs. The

Government have consistently sought to hit at Labour authorities working in areas of serious social and economic need. The settlement will do so again.
Some authorities have been rate-capped and their position is worse. All face cuts. Some, like Hackney and Haringey, face catastrophe. Some, like Leicester, have been told that they have got to cut their rate by 50 per cent. even though, if the assumptions were correct, that would lead to a doubling of their rate next year.
I have not been in the Chamber all day so I did not get this at first hand, but I understand that rate-capped and high penalty authorities have decided today to seek a collective meeting with the Secretary of State to put forward representations about the dire problems they face. The hon. Member for Devizes (Mr. Morrison) spoke of the impossible position of Conservative authorities. Labour authorities are in the same difficulty. It is the hope of all my hon. Friends that that meeting will be fruitful and that the Secretary of State will recognise that he is pushing authorities into a corner from which they may not reasonably be able to extract themselves.
In regard to the shire counties and Conservative authorities, last year Environment Ministers staved off a major Back Bench rebellion only by giving promises to the right hon. Member for Cambridgeshire, South-East (Mr. Pym) of better things to come. The hon. Member for Bristol, West (Mr. Waldegrave) gave a categorical "yes" when asked by his right hon. Friend:
from 1985–86 and thereafter, will the Minister be fairer to the low-spending authorities than his statement suggests?—[Official Report, 23 January 1984; Vol. 52, c. 737.]
I remind the Minister and Government Back Benc hers that that promise has not been met.

Mr. Bowen Wells: Hear, hear.

Mr. Straw: That "Hear, hear" came from the hon. Member for Hertford and Stortford (Mr. Wells) on the Government's Back Benches.
Hon. Members need not take this from me. They should have listened to the comments of their hon. Friends and of the Association of County Councils. The hon. Member for Uxbridge (Mr. Shersby) described the settlement as manifestly unjust. The hon. Member for Davyhulme (Mr. Churchill) said that his authority had been kicked in the teeth. We have heard many similar epithets about the settlement.
The final absurdity about the system, if it can be adorned with that name, that the Government have created, is that the Government claim that they have had to hit Labour overspenders so as to help Conservative underspenders. Some hon. Members on the Government Benches understand this, but it is so bizarre that most people turn off when it is explained to them. So crazy is the system that Conservative underspenders have only escaped even more massive cuts in grants and increases in rates because of overspending by Labour authorities.
If the Government's policy for Labour authorities works, if those authorities sack staff by the thousand and make massive cuts to meet the Government's targets, who will benefit? Not the low-spending shire authorities—quite the reverse. As expenditure came down in the high-spending Labour authorities, they would earn more grant. As the Treasury will not give the Secretary of State more total grant, the additional grant for the Labour authorities


would come from Conservative authorities. Hon. Members do not need to take it from me; it is in the Official Report.
When Government Back Benchers go through the Lobby tonight they should appreciate that they are voting for higher rates in their own areas. If Labour authorities meet the Government's targets, Berkshire will lose £35 million in grant and have a 20 per cent. increase in rates. The right hon. Member for Cambridgeshire, South-East is not here, but before he goes into the Lobby he should weigh with care the fact that Cambridgeshire would lose £26 million in grant and its rates would go up 21 per cent. Essex would lose £35 million in grant and its rates would go up by 25 per cent. Kent would lose £90 million in grant and its rates would go up by 35 per cent. Wiltshire would lose £80 million in grant and its rates would increase by 22 per cent. West Sussex would lose so much that its rate would go up by 44 per cent. and it would get no grant at all; it would be in the same position as the GLC.
It is said that those whom the gods wish to destroy, they first make mad. This is a mad, crazy system in which the Secretary of State has imprisoned himself and the other authorities. If he were kicking the guts out of Labour authorities, one would have thought that at the very least Conservative authorities would benefit, but not a bit of it. If that policy works, and Labour authorities sack thousands of people, the result will be cuts among Conservative authorities and massive rate rises. That is written in the Minister's own answers.
The Government's policy towards local government is bereft of compassion, comprehension and common sense. The system that they have created defies rational analysis or explanation. It savages authorities which spend too much and impoverishes those which spend too little. Above all, this system has already destroyed local choice and freedom in pursuit of an utterly bankrupt economic policy. If carried through, it will destroy thousands of jobs and undermine the quality of life for millions of our citizens. That will be the consequence if this report is approved. That is why the Labour Opposition condemn it utterly and will vote against it tonight.

The Minister for Local Government (Mr. Kenneth Baker): As the hon. Member for Blackburn (Mr. Straw) said, this is my maiden speech in a rate support grant debate. In the years that I have been in the House, when I have looked in on such debates, I have soon found that on the whole hon. Members keep away from them unless they have been alerted to attend by their local authorities. Rates debates are occasions when the disgruntled speak to the disenchanted in front of the disbelieving. Every system of rate support, including the one which existed in the 1960s and 1970s, is well nigh incomprehensible and is understood only by the initiated. Thankfully, few hon. Members wish to be initiated.
I accept that the system is byzantine in its complexity and that it is probably fully comprehended only by those who have a taste for scholastic theology. I can only recall the remarks of Palmerston on the Schleswig-Holstein question last century, when he said that only three people understood it—himself, a Danish professor who was in an asylum and a third who had died.
I appreciate that it is exceptionally difficult to explain our system and that in double quick time, in attempting to discuss it, one sinks into a jargon which Mr. Edward Pearce of The Daily Telegraph referred to as
the verbal sludge of municipal speak".
Therefore, I have every sympathy with those on both sides of the House who are impatient with this system and want to see one that is more easily understood and more predictable in its effect.
My right hon. Friend the Member for Guildford (Mr. Howell) made that point in his speech when he called for a more strategic, systematic and sustainable way of running our affairs. My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) also made that point, as did my hon. Friends the Members for Hornchurch (Mr. Squire) and for Langbaurgh (Mr. Holt). They welcomed the review that I am undertaking. So did the hon. Member for Blackburn, who, in an elegant and interesting speech—it was a pity that more of his hon. Friends were not present to hear it—addressed himself to some of the fundamental issues which I shall have to include in the review. In that review it will be possible to cover some of the points raised by my hon. Friend the Member for Davyhulme (Mr. Churchill), who referred to the extreme differences in rateable resources. Inevitably, such questions will have to be considered in the review.
I noted the points made by my hon. Friend the Member for Rochford (Dr. Clark) who pressed me to consider the fundamental changes that are needed.

Mr. Bowen Wells: Will my right hon. Friend give way?

Mr. Baker: I hope that my hon. Friend will allow me to press on for a moment, because I should like to answer the points that have been raised.
My hon. Friend the Member for Uxbridge (Mr. Shersby) spoke about Hillingdon. I very much appreciate the efforts made by Hillingdon council to reduce the high level of spending that it inherited. I regret that in a year when we have provided more favourable targets for most authorities, we have not been able to do as much as it would have liked.

Mr. Wilkinson: I appreciate, as always, my right hon. Friend's generous sentiments, but I must vote against the settlement. Last year my hon. Friend the Under-Secretary of State for the Environment made some reassuring remarks to my right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym). We were led to expect a better settlement than this, and for that very good reason I shall not be able to support the Government.

Mr. Baker: I understand. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) has made his position clear to me. Accompanied by his colleague the hon. Member for Hayes and Harlington (Mr. Dicks), he brought a delegation to see me. I shall deal shortly with the commitment on targets that was made in last year's debate. The target was directed towards low spenders.
I did not hear the speech by my hon. Friend the Member for Sevenoaks (Mr. Wolfson), but I have been told what he said. I was aware of his view because he, too, brought a delegation of councillors to see my hon. Friend the Under-Secretary. I shall certainly examine the important matter of the parish council precept for his area.
My hon. Friend the Member for Langbaurgh, apart from supporting the review, said that apparently some


acres of Cleveland county had been overlooked. If we have lost bits of Cleveland, I assure him that they will be discovered and the appropriate changes will be made.

Mr. Holt: When they have been discovered, will we receive the correct rate support grant, which we have so far been denied?

Mr. Baker: If the areas have been lost and they are discovered, justice will be done.
I enter a note of caution about the review. Any system which seeks to distribute £12 billion to over 400 local authorities by way of grant must be complex. The attempts to recognise the different resources and expenditure needs of different areas adds a great deal to the complexity. Attempts at trying to be fair in that distribution of central Government grant make the system complex.
The system which preceded that which now operates was equally complex and equally difficult to understand. It was based upon what mathematicians call regression analysis, which meant that the more one spent, the more grant one received. That gave a great boost to the continual high spenders.
One of the advantages of the present system is that it has broken the link, but it is complicated. The old system required 14 variable step-wise multi-variate regression analyses. In the late 1970s that could be done only on a computer in America. I say that because to find a system which is transparently simple and clear might be difficult. I have no shadow of doubt that I have to try to point the way towards a system which more people can understand and explain.
It is alleged that the complexity of the system increases the tension between central and local government. The real reason for so much tension about rate support is that since 1979 we have tried to restrain the total level of local authority spending. If one examines the pattern over the last 20 years, one sees that local authority spending in the 1960s and 1970s was rising by about 3·5 per cent. a year in real terms. Since we have been in office it has risen by about 1 per cent., or slightly less, in real terms per year.
The first Minister who tried to put the handbrake on local authority expenditure was Tony Crosland when, in 1976, he went to Manchester city hall and made a grave speech saying that the party was over. It was over for about a year, and then the high-spending pattern revived and we inherited a very high level and increasing rate of growth of local authority expenditure. Since 1979 we have been trying to reverse the trend, and we have had some success. However, I do not underestimate the difficulty that that imposes upon local authorities, whether Labour or Conservative.
The Government continue to keep a tight control on local authority expenditure. We have been able to set targets for 1985–86 which assist and reward the low-spending authorities. That fulfils the commitment given by my right hon. Friend and my hon. Friend the Under-Secretary during the debate a year ago.
Those authorities spending just below GREA have been allowed to increase their spending by 4·5 per cent. A few authorities — those spending not only below GREA but close to target — can increase their spending by 4·625 per cent. That is much better than has been possible for the past two years. For those authorities, there should be no real cuts. I am aware that many of those authorities still feel hard done by, and some believe that the targets set for next year are still too easy for the high spenders.

Mr. Churchill: It is not correct to say that all low spenders will receive the 4·625 per cent. increase. Some, such as Trafford, are having it clawed back under the negative marginal rate. It is clear that that is not a fulfilment of the pledge given last year, because Trafford is being given £200,000 but will have £2 million taken away. For that reason I—and I am not alone in this— will have no choice but to vote against the settlement.

Mr. Baker: I appreciate my hon. Friend's point, but it is on a different part of the system. I am talking about the targets set for expenditure. The 4·625 per cent. increase applies to Trafford next year. My hon. Friend is referring to grants.
I am aware that many of the low-spending authorities still feel that the high spenders are getting away with it. That has been expressed by the leaders of some of the shire authorities. I have told them that the high spenders are not getting away with it. Targets set for overspending authorities spending above GREA have been tough. As Opposition Members have said, that has involved real reductions in expenditure—in some cases as much as 6 per cent.
The targets that we have set do not favour the high spenders, and the controls on them are threefold. First, there are tougher targets for them. The hon. Members for Burnley (Mr. Pike) and for Sheffield, Heeley (Mr. Michie) made that point. Secondly, there are higher penalties in the amount of grant that is lost if the targets are exceeded. The level of penalty has been criticised, but those who overspend their target this year will suffer a very severe cut in grant. Thirdly, the 18 high spenders have been rate-capped.
I appreciate that the low spenders feel that their regard for Government policy during the past four years has been inadequately recognised. That has been the burden of many of the comments from hon. Members from both sides of the House. My hon. Friend the Member for The Wrekin (Mr. Hawksley) made the case for the county of Shropshire and my hon. Friend the Member for Suffolk, Central (Mr. Lord) made the case for Suffolk. I re-emphasise the point made by my right hon. Friend during his speech. I repeat again that we would like to abandon targets and holdback altogether, but that depends on the level of local authorities' budgets — how much they spend in the next year, 1985–86—and on the alternative pressures which can be brought to bear to achieve the delivery of the Government's public expenditure plans. We are considering various alternatives urgently to see whether they would be operable.

Mr. Charles Morrison: As my right hon. Friend began by speaking of targets with reference to tight controls and notes of caution, will he give a guarantee, looking further ahead — this is important in relation to an intervention of mine when the Secretary of State was speaking — that, whatever happens, the situation facing shire counties in 1986–87 will be better than it is now?

Mr. Baker: I remind the House that my right hon. Friend said earlier that the more favourable targets which we have been able to give low-spending authorities for 1985–86 have been possible only through the savings which have been achieved in public expenditure terms by rate capping the highest spenders. Rate capping will


continue to produce savings in 1986–87 as we continue to bring down the excessive spending levels of the high spenders.
Thus, low-spending authorities will benefit from rate capping. For authorities which budget in the coming year, 1985–86, to spend at or below both target and GREA, targets for the following year, 1986–87, will take account of those further savings to be achieved from rate capping the highest spenders. To answer my hon. Friend's intervention, these low spenders' targets in 1986–87 will therefore be both more favourable than they would have been but for rate capping, and more favourable than for authorities which budget this year to spend above either target or GREA.

Mr. Eldon Griffiths: As one who will be supporting my right hon. Friend in the Lobby tonight, may I remind him that many of us will be doing so because of the prospect that has been held out of targets being got rid of altogether? That cannot come too soon. I appreciate the Government's difficulty in giving commitments against the changing background of public expenditure. Nevertheless, will my right hon. Friend give to shire counties, or at least to low-spending counties, some incentive which will enable them to assist the Government to get rid of targets that have been unjust?

Mr. Baker: I shall consider what my hon. Friend has said. The undertaking that we have given is to set targets which recognise low spending by the shire counties.

Dr. Cunningham: That question was asked in last year's debate, when many Conservative Members went into the Lobby in support of the Government on the basis of the assurances that they were then given. The outcome, according to the Association of County Councils, is that the average target increase for shire counties is 4·6 per cent., compared with the national average increase in target of 6·8 per cent. It remains the position, therefore, even under the present White Paper, that the lower-spending authorities receive lower average target increases. That is the reality of the situation, so what is the right hon. Gentleman's assurance worth?

Mr. Baker: I shall tell the hon. Gentleman what it is worth. I regret that we become involved at this stage in a great deal of what I described earlier as the verbal sludge of municipal speak. The hon. Gentleman is seeking to make target-to-target comparisons, but the real measure is the target-to-budget comparison. What was said a year ago about the low-spending authorities has been met. The low-spending authorities below GRE have had increases of 4·5 per cent. The increases for the very lowest spending authorities have been 4·625 per cent. The undertakings that my right hon. Friend the Secretary of State and I have given during the debate have been explicit. The leaders of the Tory shire counties have made it clear again and again that they expect recognition to continue of their efforts to keep spending low.
The hon. Member for Blackburn made an interesting and important comment. I was delighted to hear from him that the Labour rate capped authorities are now prepared to discuss the Rates Act 1984. My right hon. Friend said last week that if they wished to meet him collectively he would be happy to see them, and the Government stand

by that. The earlier the meeting, the better. However, as the circumstances of authorities vary greatly, any decision to change the rates limit of a particular authority must take account of its circumstances. I hope that the authorities will come to the meeting ready, if they wish, to make clear their views on their proposed rate limits in their respective financial positions. My right hon. Friend will be able to consider any new information before reaching his final decision.
Rate capping has been mentioned on several occasions during the debate. I remind the House that there will be other opportunities to discuss the matter, as the orders applying to the precepting and rating authorities will have to be debated. The help that we have been able to provide for the low spending shire counties this year depends essentially upon our rate capping proposals.
The proportion of local expenditure which central Government have funded through grants will fall next year from 51·9 to 48·7 per cent. That was very much the main thrust of the speech of the hon. Member for Copeland (Dr. Cunningham). The RSG has dropped from 61 per cent. since the Conservative Government took office in 1979. We have taken this course to increase the accountability of local authorities. It is the main reason for the drop in grant to the shire counties and districts this year.
I am aware of the campaign that has been run by many of the high-spending Labour authorities against the Government's policy. They are demanding that they should be given back the grant which they would have had if the level of Government funding had remained at 61 per cent. The hon. Member for Copeland said, in effect, "When you came in, Government support was 61 per cent. It has been reduced progressively to 48·7 per cent." It is claimed by many, including many Labour Members, that the moneys which have been made available belong to the high-spending authorities. They advance the argument that the Government have stolen their grant. Some authorities seem to imagine that they have an inalienable entitlement to taxpayers' money. They imagine that they have the right to put their municipal fingers into taxpayers' pockets. It is fanciful to claim that the Government have stolen local authority grant. It is not their grant, and there is nothing special or sacred about 61 per cent.
The grant percentage is calculated each year and authorities have no right to expect their grant in any particular year to be based on what they received in any previous year. The Labour Government reduced the percentage from 66·6 per cent. in 1975–76 to 61 per cent. in 1977–78 and 1978–79. That cut, which was introduced by the then Chancellor of the Exchequer, was by far the largest ever made. If one counted up all that money, one would find that by the time the Labour party left office £1·4 billion had been forgone. I never heard arguments from any Labour Members that this money should be given back.

Mr. Straw: The right hon. Gentleman should not try to mislead the House about the record of the last Labour Government. When Labour came into government the rate of grant was set at 61 per cent., and it was 61 per cent. when Labour left office. The rate was increased to 66 per cent. to cover the exceptional increase in the cost of the Houghton recommendations in 1975. The last Labour Government's record was one of maintaining the grant at above 60 per cent., and this Government's record is of cutting the grant every year, year by year.

Mr. Baker: The hon. Gentleman's figures are correct. The rate started at 61 per cent., and went up to 66 per cent. The largest single cut of central Government support to local authorities was made by the Labour Government. We believe that we have been right since 1979 to continue to reduce that grant.

Mr. Simon Hughes: We certainly accept the proposition that local authorities have no inalienable right to taxpayers' money. In return, the right hon. Gentleman must accept the proposition that, when central Government impose duties on local authorities, and when services have to be provided, money must be found from somewhere. Establishing a system which does not allow that is not justifiable by anyone's reckoning.

Mr. Baker: The present system seeks to do that, and it does so. It seeks to measure the expenditure needs of different authorities. We have heard that many hon. Members are dissatisfied, and I accept their criticisms. The system is by no means perfect. We have been right in protecting the taxpayer by reducing the amount of central Government grant to local authorities. It is often said that the consequence is an increase in the level of rates. I remind the House that the average level of rate increase has fallen during the past four years, as the hon. Member for Blackburn reminded the House. In 1980–81 there was an average increase of 27 per cent. It fell to 23 per cent., to 16 per cent., and then to 13 per cent. In the last year the average increase in domestic rate has been 6·4 per cent.—the lowest for 10 years. I hope that my right hon. and hon. Friends will note that fact.
What policy on local government expenditure would the Opposition follow? Would they allow expenditure to go through the roof and force up rates? That idea was implicit in the speech of the hon. Member for Blackburn. Would the Opposition increase the central Exchequer grant to local authorities? That would be bound to increase taxes.
Local government expenditure can be financed from only two sources, because local authorities cannot borrow for their current spending. Local government expenditure can be financed from either rates or taxes. Several hon. Members have rightly said that it cannot be satisfactory to have rates as the single tax base because that places too great a burden on too few shoulders. Each year, a smaller number of householders pay rates. My hon. Friend the Member for Hornchurch made that point, and that is one matter that I shall have to study carefully in my review.
The ratepayers know only too well which party protects their interests. This Government's record should leave them in no doubt. We have reduced the seemingly inexorable growth in spending, without unacceptable reductions in services. We have abolished supplementary rates, which has prevented ratepayers from being caned twice in one year. We have obliged all authorities to consult properly and fully with their industrial and commercial ratepayers. We have set up the Audit Commission, with a new emphasis on value for money in the provision of services. We have introduced selective rate capping to protect the ratepayers of the highest spending authorities, including the GLC, from the extravagant waste of money by those authorities on political propaganda. As my hon. Friends know, £10 million was spent by the GLC on that propaganda. What would that money have bought in terms of meals on wheels or home helps?
That is the kind of unacceptable expenditure against which we are acting. It has nothing to do with services; it is purely political. If anyone seriously believes that ratepayers would have seen such achievements under a Labour Government, I suggest that he looks again at the history books. Average rate increases have fallen in each of the past five years. That is what ratepayers want, and that is what the Government have given them. It is what the 1985–86 settlement will achieve if local authorities behave responsibly. I commend these documents to the House.

Question put and agreed to.

Resolved,
That the Rate Support Grant Supplementary Report (England) (No. 2) 1984/85 (House of Commons Paper No. 81), which was laid before this House on 11th December, be approved.

RATE SUPPORT GRANT (ENGLAND) (No. 3) I983/84

Resolved,
That the Rate Support Grant Supplementary Report (England) (No. 3) I983/84 (House of Commons Paper No. 82), which was laid before this House on 11th December, be approved.—[Mr. Patrick Jenkin.]

RATE SUPPORT GRANT REPORT (ENGLAND) 1985/86

Question put,
That the Rate Support Grant Report (England) 1985/86 (House of Commons Paper No. 142), which was laid before this House on 20th December, be approved. — [Mr. Patrick Jenkin.]

The House divided: Ayes 343, Noes 211.

Division No. 67]
[10 pm


AYES


Adley, Robert
Butcher, John


Aitken, Jonathan
Butler, Hon Adam


Alexander, Richard
Butterfill, John


Alison, Rt Hon Michael
Carlisle, John (N Luton)


Amess, David
Carlisle, Kenneth (Lincoln)


Ancram, Michael
Carlisle, Rt Hon M. (W'ton S)


Arnold, Tom
Carttiss, Michael


Ashby, David
Cash, William


Aspinwall, Jack
Chalker, Mrs Lynda


Atkins, Robert (South Ribble)
Channon, Rt Hon Paul


Baker, Rt Hon K. (Mole Vall'y)
Chapman, Sydney


Baker, Nicholas (N Dorset)
Chope, Christopher


Baldry, Tony
Clark, Hon A. (Plym'th S'n)


Banks, Robert (Harrogate)
Clark, Sir W. (Croydon S)


Batiste, Spencer
Clarke, Rt Hon K. (Rushcliffe)


Bellingham, Henry
Clegg, Sir Walter


Bendall, Vivian
Cockeram, Eric


Bevan, David Gilroy
Colvin, Michael


Biffen, Rt Hon John
Conway, Derek


Blackburn, John
Coombs, Simon


Blaker, Rt Hon Sir Peter
Cope, John


Body, Richard
Corrie, John


Bonsor, Sir Nicholas
Couchman, James


Bottomley, Peter
Cranborne, Viscount


Bottomley, Mrs Virginia
Critchley, Julian


Bowden, A. (Brighton K'to'n)
Crouch, David


Bowden, Gerald (Dulwich)
Currie, Mrs Edwina


Boyson, Dr Rhodes
Dickens, Geoffrey


Braine, Rt Hon Sir Bernard
Dorrell, Stephen


Brandon-Bravo, Martin
Douglas-Hamilton, Lord J.


Bright, Graham
Dover, Den


Brinton, Tim
du Cann, Rt Hon Sir Edward


Brittan, Rt Hon Leon
Dunn, Robert


Brooke, Hon Peter
Durant, Tony


Brown, M. (Brigg &amp; Cl'thpes)
Edwards, Rt Hon N. (P'broke)


Browne, John
Eggar, Tim


Bruinvels, Peter
Emery, Sir Peter


Bryan, Sir Paul
Evennett, David


Buck, Sir Antony
Eyre, Sir Reginald


Bulmer, Esmond
Fairbairn, Nicholas


Burt, Alistair
Fallon, Michael






Farr, Sir John
Kershaw, Sir Anthony


Favell, Anthony
Key, Robert


Fenner, Mrs Peggy
Kilfedder, James A.


Fletcher, Alexander
King, Roger (B'ham N'field)


Fookes, Miss Janet
King, Rt Hon Tom


Forman, Nigel
Knight, Gregory (Derby N)


Forsyth, Michael (Stirling)
Knight, Mrs Jill (Edgbaston)


Forth, Eric
Knowles, Michael


Fowler, Rt Hon Norman
Knox, David


Fox, Marcus
Lamont, Norman


Franks, Cecil
Latham, Michael


Fraser, Peter (Angus East)
Lawler, Geoffrey


Freeman, Roger
Lawrence, Ivan


Fry, Peter
Lee, John (Pendle)


Gale, Roger
Leigh, Edward (Gainsbor'gh)


Galley, Roy
Lennox-Boyd, Hon Mark


Gardiner, George (Reigate)
Lester, Jim


Gardner, Sir Edward (Fylde)
Lewis, Sir Kenneth (Stamf'd)


Garel-Jones, Tristan
Lightbown, David


Gilmour, Rt Hon Sir Ian
Lilley, Peter


Glyn, Dr Alan
Lloyd, Ian (Havant)


Goodlad, Alastair
Lloyd, Peter, (Fareham)


Gorst, John
Lord, Michael


Gow, Ian
Lyell, Nicholas


Gower, Sir Raymond
McCrindle, Robert


Grant, Sir Anthony
McCurley, Mrs Anna


Greenway, Harry
Macfarlane, Neil


Gregory, Conal
MacGregor, John


Griffiths, E. (B'y St Edm'ds)
MacKay, Andrew (Berkshire)


Griffiths, Peter (Portsm'th N)
MacKay, John (Argyll &amp; Bute)


Grist, Ian
Maclean, David John


Ground, Patrick
McNair-Wilson, P. (New F'st)


Grylls, Michael
Major, John


Gummer, John Selwyn
Malins, Humfrey


Hamilton, Hon A. (Epsom)
Malone, Gerald


Hamilton, Neil (Tatton)
Maples, John


Hampson, Dr Keith
Marland, Paul


Hanley, Jeremy
Marlow, Antony


Hannam, John
Marshall, Michael (Arundel)


Hargreaves, Kenneth
Mates, Michael


Harris, David
Mather, Carol


Harvey, Robert
Maude, Hon Francis


Haselhurst, Alan
Mawhinney, Dr Brian


Havers, Rt Hon Sir Michael
Mayhew, Sir Patrick


Hawkins, C. (High Peak)
Mellor, David


Hawkins, Sir Paul (SW N'folk)
Meyer, Sir Anthony


Hawksley, Warren
Miller, Hal (B'grove)


Hayes, J.
Mills, lain (Meriden)


Hayhoe, Barney
Mills, Sir Peter (West Devon)


Hayward, Robert
Mitchell, David (NW Hants)


Heathcoat-Amory, David
Moate, Roger


Heddle, John
Monro, Sir Hector


Henderson, Barry
Moore, John


Heseltine, Rt Hon Michael
Morrison, Hon C. (Devizes)


Hickmet, Richard
Morrison, Hon P. (Chester)


Hicks, Robert
Moynihan, Hon C.


Higgins, Rt Hon Terence L.
Mudd, David


Hind, Kenneth
Neale, Gerrard


Hogg, Hon Douglas (Gr'th'm)
Needham, Richard


Holland, Sir Philip (Gedling)
Neubert, Michael


Holt, Richard
Newton, Tony


Hordern, Peter
Nicholls, Patrick


Howard, Michael
Norris, Steven


Howarth, Gerald (Cannock)
Onslow, Cranley


Howe, Rt Hon Sir Geoffrey
Oppenheim, Phillip


Howell, Rt Hon D. (G'ldford)
Oppenheim, Rt Hon Mrs S.


Howell, Ralph (N Norfolk)
Osborn, Sir John


Hubbard-Miles, Peter
Ottaway, Richard


Hunt, David (Wirral)
Page, Richard (Herts SW)


Hunt, John (Ravensbourne)
Parkinson, Rt Hon Cecil


Hunter, Andrew
Parris, Matthew


Hurd, Rt Hon Douglas
Patten, Christopher (Bath)


Jackson, Robert
Patten, John (Oxford)


Jenkin, Rt Hon Patrick
Pawsey, James


Johnson Smith, Sir Geoffrey
Percival, Rt Hon Sir Ian


Jones, Gwilym (Cardiff N)
Pollock, Alexander


Jones, Robert (W Herts)
Porter, Barry


Jopling, Rt Hon Michael
Portillo, Michael


Joseph, Rt Hon Sir Keith
Powell, William (Corby)


Kellett-Bowman, Mrs Elaine
Powley, John





Price, Sir David
Taylor, John (Solihull)


Prior, Rt Hon James
Taylor, Teddy (S'end E)


Proctor, K. Harvey
Tebbit, Rt Hon Norman


Pym, Rt Hon Francis
Temple-Morris, Peter


Raffan, Keith
Terlezki, Stefan


Raison, Rt Hon Timothy
Thatcher, Rt Hon Mrs M.


Rathbone, Tim
Thomas, Rt Hon Peter


Rees, Rt Hon Peter (Dover)
Thompson, Donald (Calder V)


Renton, Tim
Thompson, Patrick (N'ich N)


Rhodes James, Robert
Thorne, Neil (Ilford S)


Rhys Williams, Sir Brandon
Thornton, Malcolm


Ridley, Rt Hon Nicholas
Thurnham, Peter


Roberts, Wyn (Conwy)
Townend, John (Bridlington)


Robinson, Mark (N'port W)
Townsend, Cyril D. (B'heath)


Roe, Mrs Marion
Tracey, Richard


Rossi, Sir Hugh
Trippier, David


Rost, Peter
Trotter, Neville


Rowe, Andrew
Twinn, Dr Ian


Rumbold, Mrs Angela
van Straubenzee, Sir W.


Ryder, Richard
Vaughan, Sir Gerard


Sackville, Hon Thomas
Viggers, Peter


Sainsbury, Hon Timothy
Waddington, David


Sayeed, Jonathan
Wakeham, Rt Hon John


Scott, Nicholas
Waldegrave, Hon William


Shaw, Giles (Pudsey)
Walden, George


Shaw, Sir Michael (Scarb')
Walker, Bill (Tside N)


Shelton, William (Streatham)
Walker, Rt Hon P. (W'cester)


Shepherd, Colin (Hereford)
Waller, Gary


Shepherd, Richard (Aldridge)
Walters, Dennis


Silvester, Fred
Ward, John


Sims, Roger
Wardle, C. (Bexhill)


Skeet, T. H. H.
Warren, Kenneth


Smith, Tim (Beaconsfield)
Watson, John


Soames, Hon Nicholas
Watts, John


Speed, Keith
Wells, Bowen (Hertford)


Speller, Tony
Wells, Sir John (Maidstone)


Spence, John
Wheeler, John


Spencer, Derek
Whitfield, John


Spicer, Jim (W Dorset)
Whitney, Raymond


Spicer, Michael (S Worcs)
Wiggin, Jerry


Squire, Robin
Winterton, Mrs Ann


Stanbrook, Ivor
Winterton, Nicholas


Stanley, John
Wolfson, Mark


Steen, Anthony
Wood, Timothy


Stern, Michael
Woodcock, Michael


Stevens, Martin (Fulham)
Yeo, Tim


Stewart, Allan (Eastwood)
Young, Sir George (Acton)


Stewart, Andrew (Sherwood)
Younger, Rt Hon George


Stewart, Ian (N Hertf'dshire)



Stokes, John
Tellers for the Ayes:


Stradling Thomas, J.
Mr. Robert Boscawen and


Sumberg, David
Mr. Ian Lang.


Tapsell, Sir Peter





NOES


Adams, Allen (Paisley N)
Brown, Ron (E'burgh, Leith)


Alton, David
Bruce, Malcolm


Anderson, Donald
Buchan, Norman


Ashdown, Paddy
Caborn, Richard


Ashley, Rt Hon Jack
Callaghan, Jim (Heyw'd &amp; M)


Ashton, Joe
Campbell, Ian


Atkinson, N. (Tottenham)
Campbell-Savours, Dale


Bagier, Gordon A. T.
Canavan, Dennis


Banks, Tony (Newham NW)
Carlile, Alexander (Montg'y)


Barnett, Guy
Carter-Jones, Lewis


Barron, Kevin
Cartwright, John


Beckett, Mrs Margaret
Churchill, W. S.


Beith, A. J.
Clark, Dr David (S Shields)


Bell, Stuart
Clarke, Thomas


Benn, Tony
Clay, Robert


Bennett, A. (Dent'n &amp; Red'sh)
Clwyd, Mrs Ann


Bermingham, Gerald
Cocks, Rt Hon M. (Bristol S.)


Bidwell, Sydney
Cohen, Harry


Boothroyd, Miss Betty
Coleman, Donald


Boyes, Roland
Concannon, Rt Hon J. D.


Bray, Dr Jeremy
Cook, Frank (Stockton North)


Brown, Gordon (D'f'mline E)
Cook, Robin F. (Livingston)


Brown, Hugh D. (Provan)
Corbett, Robin


Brown, N. (N'c'tle-u-Tyne E)
Corbyn, Jeremy


Brown, R. (N'c'tle-u-Tyne N)
Cowans, Harry






Craigen, J. M.
Harrison, Rt Hon Walter


Crowther, Stan
Hart, Rt Hon Dame Judith


Cunliffe, Lawrence
Hattersley, Rt Hon Roy


Cunningham, Dr John
Haynes, Frank


Dalyell, Tam
Healey, Rt Hon Denis


Davies, Rt Hon Denzil (L'lli)
Heffer, Eric S.


Davies, Ronald (Caerphilly)
Hogg, N. (C'nauld &amp; Kilsyth)


Davis, Terry (B'ham, H'ge H'l)
Holland, Stuart (Vauxhall)


Deakins, Eric
Home Robertson, John


Dewar, Donald
Howells, Geraint


Dicks, Terry
Hoyle, Douglas


Dixon, Donald
Hughes, Dr. Mark (Durham)


Dobson, Frank
Hughes, Robert (Aberdeen N)


Dormand, Jack
Hughes, Roy (Newport East)


Douglas, Dick
Hughes, Simon (Southwark)


Dubs, Alfred
Janner, Hon Greville


Dunwoody, Hon Mrs G.
John, Brynmor


Eadie, Alex
Johnston, Russell


Eastham, Ken
Jones, Barry (Alyn &amp; Deeside)


Ellis, Raymond
Kaufman, Rt Hon Gerald


Evans, John (St. Helens N)
Kennedy, Charles


Ewing, Harry
Kilroy-Silk, Robert


Fatchett, Derek
Kirkwood, Archy


Faulds, Andrew
Lambie, David


Field, Frank (Birkenhead)
Lamond, James


Fields, T. (L'pool Broad Gn)
Leadbitter, Ted


Fisher, Mark
Leighton, Ronald


Flannery, Martin
Lewis, Ron (Carlisle)


Forrester, John
Lewis, Terence (Worsley)


Foulkes, George
Litherland, Robert


Fraser, J. (Norwood)
Lloyd, Tony (Stretford)


Freeson, Rt Hon Reginald
Lofthouse, Geoffrey


Freud, Clement
McCartney, Hugh


Garrett, W. E.
McDonald, Dr Oonagh


George, Bruce
McGuire, Michael


Gilbert, Rt Hon Dr John
McKay, Allen (Penistone)


Godman, Dr Norman
McKelvey, William


Golding, John
Mackenzie, Rt Hon Gregor


Gould, Bryan
Maclennan, Robert


Gourlay, Harry
McTaggart, Robert


Hamilton, W. W. (Central Fife)
McWilliam, John


Hancock, Mr. Michael
Madden, Max


Harman, Ms Harriet
Marek, Dr John





Marshall, David (Shettleston)
Sheerman, Barry


Mason, Rt Hon Roy
Sheldon, Rt Hon R.


Maxton, John
Shersby, Michael


Maynard, Miss Joan
Shore, Rt Hon Peter


Meacher, Michael
Short, Ms Clare (Ladywood)


Meadowcroft, Michael
Short, Mrs R.(W'hampt'n NE)


Michie, William
Silkin, Rt Hon J.


Mikardo, Ian
Skinner, Dennis


Millan, Rt Hon Bruce
Smith, C.(Isl'ton S &amp; F'bury)


Miller, Dr M. S. (E Kilbride)
Smith, Rt Hon J. (M'kl'ds E)


Mitchell, Austin (G't Grimsby)
Snape, Peter


Montgomery, Sir Fergus
Soley, Clive


Morris, Rt Hon A. (W'shawe)
Spearing, Nigel


Oakes, Rt Hon Gordon
Steel, Rt Hon David


O'Brien, William
Stott, Roger


Orme, Rt Hon Stanley
Strang, Gavin


Owen, Rt Hon Dr David
Straw, Jack


Park, George
Thomas, Dafydd (Merioneth)


Parry, Robert
Thomas, Dr R. (Carmarthen)


Patchett, Terry
Thompson, J. (Wansbeck)


Pavitt, Laurie
Thome, Stan (Preston)


Pendry, Tom
Tinn, James


Penhaligon, David
Torney, Tom


Pike, Peter
Wainwright, R.


Powell, Raymond (Ogmore)
Wallace, James


Prescott, John
Warden, Gareth (Gower)


Radice, Giles
Weetch, Ken


Randall, Stuart
Welsh, Michael


Redmond, M.
White, James


Rees, Rt Hon M. (Leeds S)
Wigley, Dafydd


Richardson, Ms Jo
Wilkinson, John


Roberts, Ernest (Hackney N)
Williams, Rt Hon A.


Robertson, George
Winnick, David


Robinson, G. (Coventry NW)
Woodall, Alec


Rogers, Allan
Wrigglesworth, Ian


Rooker, J. W.



Ross, Stephen (Isle of Wight)
Tellers for the Noes:


Rowlands, Ted
Mr. James Hamilton and


Ryman, John
Mr. Sean Hughes.


Sedgemore, Brian

Question accordingly agreed to.

Rate Support Grant (Wales)

The Secretary of State for Wales (Mr. Nicholas Edwards): I beg to move,
That the Welsh Rate Support Grant Report 1985–86 (House of Commons Paper No. 100), which was laid before this House on 12th December, be approved.
I think that it would be for the convenience of the House to discuss also the second motion:
That the Welsh Rate Support Grant Report 1985–86 (Amendment) Report (House of Commons Paper No. 147), which was laid before this House on 10th January, be approved.

Mr. Speaker: If the House agrees, so be it.

Mr. Edwards: The amendment report corrects minor errors in some of the expenditure guidance and associated figures in the main report which arose from a programming error. I am sorry that these errors occurred, but the changes involved are very small. The largest decrease in an expenditure target is only £4,000 in a target of over £200 million. However, it is only proper that, having been identified, these errors should be corrected.
This is the fifth main Welsh rate support grant report that I have put to the House. I will first examine briefly how far the Government's objectives for local authority expenditure in Wales have been achieved and the prospects for local government expenditure in the future.
I have to make the point that, despite all the assertions to the contrary, local authority current expenditure in Wales has certainly not been slashed. On the contrary, it has grown faster than the increase in costs in the economy as a whole.
I do not under-estimate the problems that local authorities face in trying to meet the many demands made on them. They have difficult choices to make. I acknowledge as well that many authorities in Wales have made considerable efforts to contain their spending. Although some authorities are overspending against targets, the general picture taking all local authorities in Wales together is one of current expenditure now broadly under control. I hope that we can build on this and continue to release resources for capital expenditure because of the relatively good performance on current account. Clearly local authorities, if they are to achieve that objective, must continue a vigorous search for improvements in efficiency, effectiveness and economy.
In circumstances where additional resources are not available, authorities are under an obligation continually to examine in a critical and searching way the services they provide, and to check whether the pattern of services developed in the past continues to be appropriate to present and anticipated conditions. This must involve authorities in a willingness to consider alternative ways of providing services, not least through utilising the competitive power of private enterprise.
A few authorities have avoided taking the hard decisions that are necessary and have taken the easy way out, using special funds to offset against expenditure—a method sometimes known as the creative accounting route. Using special funds in this way, of course, reduces an authority's total expenditure which counts against its expenditure target, but it is only a cosmetic adjustment. The use of these special funds only puts off the day when difficult decisions about expenditure have to be taken.
Dyfed is an example of an authority now facing unnecessarily severe difficulties because it has followed

such a course and deferred necessary changes over a number of years. Individual schools in Dyfed now face constraints in resources and in some cases inadequate capitation because, during the period in which school numbers were falling by 5,000, the necessary rationalisation of services was not tackled and teacher numbers were actually allowed to increase. Expenditure on education in current price terms has varied very little in the county over seven or eight years of falling school rolls and if individual schools now find themselves short of resources it can only be because Dyfed has been putting off the necessary changes that would make the most effective use of its resources.

Mr. Geraint Howells: Is the Secretary of State saying that the education authority should have closed more small local schools than it has in the past four or five years?

Mr. Edwards: I am saying that, if there are 5,000 fewer pupils, about the same amount of money in real terms to spend and a capitation problem for individual schools, the authority should be making changes in the structure over a period of years to adjust to the new pattern. If it fails to do that, it will face quite unnecessary problems. Of course it will involve closing some very small village schools. In the part of Dyfed where I live, one school is down to 10 pupils. When pupil numbers decline very fast, there comes a moment when the education authority faces inevitable decisions about changing the pattern of education.
It cannot be argued that Dyfed has been particularly short of total resources. Its target per head is below that of super-sparse Powys, which has the same problem of village schools or the geographically difficult county of Gwynedd, which also has the problem of rural schools, but it is nearly 8 per cent. higher than that of Northumberland, 9 per cent. higher than that of Cumbria and 14 per cent. higher than the figures for north Yorkshire and Cornwall. Its target this year is 4·6 per cent. higher than its reported adjusted budget for 1984–85, so it cannot be said that Dyfed is a county starved of resources and the authority must take at least some share of responsibility for not having faced the necessary changes in the patterns of education.

Mr. Alex Carlile: As the Secretary of State has now admitted what we all knew already—that he is in favour of closing very small schools—will he tell us what he regards as a very small school and which schools we should expect to be closed? Will he also give a commitment that in future when small schools are closed he will ensure that money is made available to pay for transport to the alternative schools, as that is not the case at the moment?

Mr. Edwards: Clearly there comes a point at which local education authorities must balance the choices before them — maintaining very small schools, changing the pattern of education or having inadequate capitation in existing schools. The authority must make those choices in the light of the situation that it faces. It must decide whether it wishes to allocate the available resources to transport or to maintaining the existing school premises.
With the aim of helping authorities in their forward planning and to avoid this kind of situation repeating itself, I have issued indicative expenditure targets for authorities


for 1986–87 and 1987–88. These figures should provide helpful guidance at the individual authority level. In aggregate, they show that on average the cost reduction sought by 1987–88 is about 2 per cent. That would bring current expenditure back to the level reached in 1979–80. Authorities spending at or below target will have an easier task than others in securing these reductions.
If 1985–86 budgets show that authorities, both individually and collectively, are on course to spend in line with the Government's expenditure plans, I will be prepared to consider, with the local authority associations, whether an alternative means of containing expenditure and encouraging moderate rate increases is possible for future years, rather than continuing with the present regime of individual authority expenditure targets and grant holdback penalties.
I have made no secret of my hope that it will be possible to remove individual targets from the system. Notwithstanding that, no one should doubt my determination to retain guidance figures if it was likely that, if we abandoned them, expenditure would exceed our plans and one or two irresponsible authorities would be enabled to act in such a way that they unduly penalised others.
I turn now to the details of the 1985–86 settlement. Any unbiased observer would agree that the settlement is fair. Indeed, the Welsh office of the Association of District Councils goes a long way towards saying so in the document issued to hon. Members. After allowing for the abolition of the national insurance surcharge on local authority employers from next April and the greater role of the Manpower Services Commission in particular areas of further education, total relevant expenditure, at £1,514 million, is about 5 per cent. more than authorities' budgets for the current year. Within this, current expenditure is about £46 million, around 3·5 per cent. higher.
Aggregate Exchequer grant, at just over £1,014 million, is almost £50 million or 5 per cent. higher than the amount that authorities have included in their budgets for the present year, after once again making due allowance for the abolition of NIS and the MSC-related changes next year. It is the increase in the amount of grant from that assumed by local authorities in the current year that is the key element when councils consider what rate or precept they need to levy next year.
For the individual authority expenditure targets, I have retained the basic method used in previous years, although I have increased the weight given to GRE. As in previous years, I have tried to balance the need to give the maximum increase to low-spending authorities, against the need to provide higher-spending authorities with realistic expenditure targets that it would be possible for them to achieve. Thus, no authority has an increase in current expenditure of less than 2 per cent. or, generally, of more than 4 per cent., although authorities spending at or below target also have a 0·5 per cent. "bonus". In other words, a good number of authorities have been offered a 4·5 per cent. increase in current expenditure, which is in line with prospective inflation.
Deciding what the upper and lower limits should be involves difficult judgments. There is, of course, no way of satisfying everyone, but experience this year, when 31 of the 45 authorities have budgeted to meet their expenditure targets, suggests that we are not likely to be far out in our judgment.
The grant-withholding penalties have been increased for 1985–86, and at the same time the limit on grant holdback for low rateable resource authorities has been slackened. I make no apologies for these tougher measures. If an authority is an overspender in a particular year then, all other things being equal, it must be rating for the resources needed to cover the amount of grant withheld. If grant-withholding penalties were not increased, the incentive to such authorities to reduce expenditure or at least ensure that it is not increased in the coming year would be that much weaker. Authorities spending at or below target continue to be completely exempt from both grant holdback and close-ending. Such authorities have a good degree of grant certainty. and that is a very important aspect of the present grant arrangement in Wales.

Mr. D. E. Thomas: One matter of great importance to my own constituency is the supplementary grant for national parks. How did the right hon. Gentleman arrive at the figure of £2·7 million in respect of this expenditure?

Mr. Edwards: The amount that we have allocated to the parks this year is generous and above the average that has been allocated elsewhere. Perhaps I might respond to the hon. Gentleman's question in more detail later.
I should like to say something about rates. In recent years, Welsh authorities generally have kept their rate increases down, although there have, on occasions, been glaring exceptions. Between 1981–82, which was the first year of the separate Welsh rate support grant settlement, and the present year, the average general rate poundage in Wales has increased by 12·3 per cent. whereas the rate of inflation for the same period, as measured by the GDP deflator, is somewhat more at 16·6 per cent. Notwithstanding this record, Opposition Members have consistently predicted average rate increases that are very much higher than, in the event, they have turned out to be. The indications that I have previously given of likely rate increases have turned out to be pretty accurate, and much more in line with what has happened than what the Opposition suggested.
As to next year, I said in December that with an increase in grant and relevant expenditure of about 5 per cent. over this year's adjusted budgets, and the continued moderation of the great majority of authorities, it should be within their power to keep rates down to levels generally comparable with inflation. Indeed, the House will have noted from an answer that I gave on Monday to my hon. Friend the Member for Brecon and Radnor (Mr. Hooson), that if, in 1985–86, every authority were to spend in line with its expenditure target and apply, where it is able to do so, the same amount of balances as in the current year, the all-Wales average rate increase would be about 3 per cent.
Of course, there will be variations around the average. Indeed, rate reductions are possible in some authorities, particularly in the heavily rated county areas of Mid and West Glamorgan. There could well be increases above the level of inflation in other authorities, especially cases such as Dyfed where, as I have said, special funds have been applied in the past artificially to reduce total expenditure, and where such funds are no longer available. The general picture should be one of an average rate increase below the level of inflation, and I see no reason why I should not be reporting that to the House later in the year.

Mr. Allan Rogers: Would the right hon. Gentleman like to outline, for the people of Wales, what effect his prescription will have on services that are provided for them rather than indulge in the money juggling to which his party is so accustomed?

Mr. Edwards: If the hon. Gentleman had been listening, he would have heard that local authorities are this year getting rather more than the rate of inflation. In setting out the targets and the reasonable expectations for rates that I have given, there is no reason to suggest that there should be such cuts in services as he envisages.
I repeat what I said when I announced the details of the settlement in December. I regard the settlement as very fair. That this is so reflects to an extent the restraint which has been exercised this year by most Welsh authorities. There need be no slashing cuts or horrendous reductions in services if authorities generally continue to act responsibly. They can maintain and improve key services and offer us a route away from expenditure targets. Not least important, the settlement offers the prospect of rate increases which, on average, should be below the likely level of inflation. That was never in prospect under the Labour Government. I commend my proposals for the 1985–86 Welsh rate support grant settlement to the House.

Mr. Barry Jones: The Secretary of State confessed to a blunder with regard to some of the inaccuracies in the report, and he is contrite. When the Welsh local authorities exceed their targets, the full majesty of the Secretary of State's penalty system crushes them. Welsh local authorities pay far too heavily for their errors on targets. I hope the right hon. Gentleman has not vented his spleen for this error upon his officials, because they operate a system of great complexity. Local authorities have consistently warned him of this. Surely with this system he is straining to the limit a Department which may be insufficiently staffed.
When I was thinking about how the error happened, I came across a press release entitled "Minister to meet brewers" which said that the Minister of State, Welsh Office would tour the Whitbread brewery in Gwent. It further said:
He will also discuss the brewing industry's campaign for liberalisation of the licensing laws.
Of course, the Minister of State is a very sober man, but we are perplexed as to how the error happened.
The right hon. Gentleman paid tribute to Welsh local authorities for restraining their expenditure. Nevertheless, an extremely harsh grant penalty regime has been introduced. The grant holdback scheme is to be twice as severe. The overall rate of Government grant is to be cut. The Government continue the policy of transferring the burden from the taxpayer to the ratepayer. Our local authorities are anxious about the allowances that may be made in next year's settlement with regard to the effect of pay awards. Some awards for last year, I believe, have still to be settled.
In regard to penalties, the right hon. Gentleman referred to the holdback limiter. To sharpen further the effect of penalties he has proposed to halve what is described as the limiter. As the House knows, this device modifies the penalty system for low resource authorities. It helps them because they need help. I have calculated that Mid-Glamorgan is one of the most disadvantaged

local authorities in Wales. Its average rateable value is very low. Its share of grant-related expenditure has gone down. The authority is discontented. This initiative by the right hon. Gentleman will not help local authorities with economic and social problems such as Mid-Glamorgan has to contend with.
The Welsh districts have a good spending record. Only two overspent their targets in the last year. They seek stability. They are concerned at the large variations in targets and in grant-related expenditure figures. I ask the right hon. Gentleman to justify neighbouring authorities having such large differences in grant-related expenditure figures. I give as an example the county of Dyfed. South Pembrokeshire has an increase of 19·7 per cent. in grant-related expenditure, whereas neigbouring Carmarthen has only 2·8 per cent. increase. Again, I ask the right hon. Gentleman to justify neighbouring authorities having such differences in targets. In Gwent, Blaenau Gwent has a 19·2 per cent. increase, but Torfaen has a 10·5 per cent. decrease.
I also ask the right hon. Gentleman to commit himself to announce his intention to remove penalties and targets from the Welsh scene in 1986–87. There is no record in Wales of spendthrift, profligate local authorities. They do not deserve harsh treatment. They face major economic and social problems. Our councils have to tackle those problems. It is against this background that local government in Wales displays restrained responsibility. The councils are not irresponsible.
With regard to the quality of services in the counties, the Government have had five years in office, and this settlement and settlements preceding it have had an injurious effect on the quality of services provided by the shire counties. It is not simply a matter of social services being cut back; it is worse. Social service departments cannot expand to meet increasing demands caused by high unemployment and the pressure on the social fabric of our communities.
There is now demoralisation and bitterness. The shire counties find it increasingly difficult to meet their requirements. Having made a series of visits to authorities in north and south Wales, I can state categorically that as quangos such as the Arts Council and the Wales Tourist Board face financial problems, they look to the shire counties to compensate their central expenditure. It is not surprising that tensions have risen.
It is no exaggeration to say that councillors and officers are demoralised by the Government's financial policy towards local government in Wales. It is not a soft option to transfer the cost to ratepayers when the economy is so depressed. The prospect is that there will be increasing bitterness between the elected councils and the electorate. Central Government's policy introduces tension into the processes of local government.
It is perhaps in education that the counties face the most severe pressure. It is there that the greatest anxieties lie. I believe the right hon. Gentleman to understand that. Hence, his defensive series of remarks about the local education authority in his own county of Dyfed.
The Welsh counties tell me that they expect reductions in primary and secondary school numbers, in the number of temporary teachers, in capitation allowances, and in school swimming facilities. It is expected that the cost of school meals will go up; that the loyal army of school meals attendants will have lesser, revised terms of


contract; that adult evening classes will be more costly; and that further education establishments will have to wait for the equipment needed to teach the new technology.
To make my point, I wish briefly to quote from an assessment by Her Majesty's Inspectorate — not a politically biased organisation — of the impact of financial stringency on education in Wales. under the heading "Premises", it states:
this continues to be a cause of considerable concern in a majority of LEAs … The interval between redecoration is lengthening … The net effect is a slow but persistent decline in the quality of the learning environment".
It continues:
The replacement of damaged and broken furniture is unsatisfactory in many schools … Replacement tends to be piecemeal and in small quantities. The effect is further deterioration in pupils' general learning environment".
Under the heading "Capitation", the report says:
the replacement of worn and outdated stock is being postponed … pupils' learning experiences are impoverished as a result".
It adds, in my view humiliatingly:
As textbooks wear out there is increasing dependence on worksheets … Parents continue to make a substantial contribution through school funds to the purchase of a wide range of equipment and materials. In only a minority of schools are parental contributions any longer restricted to the purchase of additional rather than essential items. In some schools the sums contributed are very large, in many cases they are equivalent to a substantial proportion of the schools' capitation and they actually exceed it in some cases.

This revealing document points a finger at the policy of the Department and the Government. It adds:
the drab appearance of many buildings does little to enhance the learning of pupils in schools where pressure on resources has already led to some impoverishment of experience.
This settlement has missed a golden chance to quicken the pace of the economy and to tackle unemployment. If the Treasury had released its brutal hold on local government finance, we might now be planning to tackle rotten housing, the still awesome problems of environmental dereliction and the stubborn, long-term unemployment totals in Wales.
Would not it be better to fund our local councils more generously than to ladle out tax cuts to the better off? We could get our construction workers off the dole by a programme of house building and environmental renewal. We could better prepare the boys and girls in our schools for the challenge of the high-tech revolution. Even at this late stage, I urge the Government to think again because I believe that the Welsh people deserve a much better deal.

Several Hon. Members: rose—

Mr. Deputy Speaker (Mr. Harold Walker): Order. There is but an hour's debating time left and I can see about 25 Welsh hon. Members, most of whom seem to want to take part in the debate. If many of them are not to be disappointed, speeches should be brief.

Mr. Keith Raffan: In yesterday's debate on unemployment the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said:
To the Opposition, a reduction in unemployment is an objective towards which every aspect of economic policy should be directed."—[Official Report, 15 january 1985; Vol 71, c. 197.]
If Opposition Members are true to that, they should welcome this settlement wholeheartedly. It is not only fair, representing as it does a 5 per cent. increase in expenditure grant, more than inflation; it is more much more than that. It will help keep the average rate increase below the inflation rate. Surely Opposition Members can welcome that. Surely they must welcome it if they are true to what the shadow Chancellor said.

Mr. Alex Carlile: In welcoming the settlement wholeheartedly, does the hon. Gentleman welcome Delyn district council facing a target reduction of 5·6 per cent.? Does he welcome all the cuts in services that will occur in his district as a result of the settlement?

Mr. Raffan: I am delighted to inform the hon. and learned Gentleman about my constituency. I spoke to the chief executive of Delyn borough council this afternoon and I can tell the hon. and learned Gentleman that no such cuts are expected. If he waits, he will be pleasantly surprised by the rate that is set for Delyn. I shall let him know when it is set. I have a good idea what it will be. No such cuts in services will be necessary. The hon. and learned Gentleman should concentrate on his own constituency instead of interfering in mine.
Opposition Members blithely speak about Britain being reduced to a one-commodity economy. They must therefore realise the importance of keeping local government expenditure under control so as not to increase the rate burden on industry. If we let local government spending rip, dramatic rate rises will greatly increase industry's costs. Indeed, industry's costs will soar. That will lead to either of two alternatives. Industry will have to reduce costs, including declaring redundancies — Opposition Members do not want that—or it will have to increase the price of products, which will give a further edge to foreign competition, increase imports and create jobs in foreign countries. Opposition Members do not want that.
I can do no better than to quote my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), who said yesterday:
That must be plain even to the simplest mind."—[Official Report, 15 January 1985; Vol. 71, c. 227.]
The labour party has made clear its desire for direct job creation. Surely it wants to avoid indirect job destruction, but that is exactly what would result from allowing local government spending to rip.
We do not really need the Opposition tonight because we know their reaction to this rate support grant settlement or to any rate support grant settlement. All that we need is a tape recording of their response to last year's settlement, or to the settlement the year before. Out come the same insipid clichés—"harsh treatment", "draconian measures", "slashing cuts in services", "putting local authorities under intolerable strain". They show scant respect for the English language, let alone the hard evidence. The Opposition always prefer wild rhetoric to the hard evidence.
The Welsh office of the Association of District Councils has caught that infectious disease. In its submission on the settlement it said:
Unless certain councils are able to make substantial cuts in service costs … they will have to make substantial increases in their part of next year's rate bills.
No doubt many county councils would take a similar view, but there is a real alternative — reordering priorities, streamlining administration and concentrating on statutory obligations.
We all know that the last people administrators will cut are themselves. That was brought out clearly in the Audit Commission's profile on Clywd county council for 1984–85. The section on staffing shows that as at March 1984 the number in the chief executive, legal and secretarial departments was 176; 108 more — 250 per cent. more than the average number of staff in similar departments in directly comparable authorities.
The architectural department numbered 163; 72 more, or more than 100 per cent. more than the same department in directly comparable authorities. No private architectural practice would survive financially relating that level of staff to the level of work undertaken. The capital projects that are the responsibility of Clwyd's architectural department average a value of between £6 million and £6·5 million. A well-known Liverpool architectural practice undertakes capital projects of £30 million with just half the staff of Clwyd—just 80 people.
Clwyd county council must get its priorities right. What does it think it is doing, buying and trying to develop Bodelwyddan castle as a tourist centre and a palace for culture? The educational part, TVEI, could easily be placed elsewhere. Why does it have to contribute £2,000 towards a sculpture in Mold bus station? It is not by a Welshman, the hon. Member for Rhondda (Mr. Rogers) will be sad to hear. It is not even by a Scotsman—it is by somebody from Sussex.
The council has no need for a dramatic cut in its services provided that it concentrates on its statutory obligations and streamlines its administration. To that end, earlier this year I and leading Conservative county councillors called for independent management consultants to be brought into the county council. The officers strongly opposed that, without giving any reason. If, as they said, their administration was devoid of waste and efficient, they should surely have welcomed independent management consultants with open arms, because they could have vindicated them.
The recent controversy over the education budget confirms my view that the sooner independent management consultants go into shire hall, the better. I am glad that I am supported in that view by the teachers union, NAS/UWT. I was also delighted to hear that at the education committee meeting on Tuesday 13 November Councillor Broderick—the vice chairman of the policy, finance and resources committee, and a Labour member — called for a detailed examination of Clwyd's base budget, something which I and Conservative county councillors have been continually calling for.
If Clwyd needs an excellent example of how to manage its affairs, it need look no further than from Mold to Flint. Delyn borough council — as the hon. and learned Member for Montgomery (Mr. Carlile) will be glad to hear —is currently examining its loss-making activities with


a view to reducing the burden that they impose on the rates. It intends doing that by more effective management of resources and by trying to generate fresh income.
Many will watch with interest when the two authorities come to set their respective rates. We can then judge which council—in the words of the Audit Commission—has
made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.

Mr. Donald Coleman: Having listened to the hon. Member for Delyn (Mr. Raffan) denigrate the county that he represents, I wonder why he ever sought to represent it in this House.
Although we are discussing the Welsh RSG settlement for 1985–86, we cannot get away from the central fact of the Government's strategy for expenditure by local authorities which has been set out by the Association of Metropolitan Authorities in its briefing to hon. Members in respect of RSG settlements in these words:
The RSG Report maintains that the Government's expenditure figures should enable the Government's policies for individual services to be maintained.
However, those figures imply a massive cut from the level of services provided by local authorities in 1984–85. For current expenditure—wages, goods and services—a cash reduction of 0·5 per cent. is demanded, which represents a real cut of £700 million.
All debates on matters affecting rate support grant, concerning England, Scotland or Wales, must be approached from a common standpoint — that the Government are determined to interfere in the activities of those who have a direct responsibility towards those who elected them. The public must accept that if the services provided by local authorities are cut, those cuts are the responsibility of the Secretary of State for Wales and his Cabinet colleagues. It is no use the Government trying to take it out on local councillors. The responsibility lies squarely on the occupants of the Treasury Bench.
The RSG settlement for Wales fails to take account of the need for economic regeneration in all parts of the Principality, the increase in total expenditure being only 5·4 per cent., which is 4·5 per cent. for current costs. The shortfall of 1·5 per cent. in the 1984–85 RSG provision has not been taken into account in the figure for 1985–86. It is reasonable to assume that the right hon. Gentleman, who has praised local authorities for their efforts in cutting costs in the last five years, should have taken account of that.
The Chancellor of the Exchequer seems glued to the idea of making cuts in income tax for the better off sections of society. If there is room for some relief, it should be used to spread the burden more widely. One way to achieve that would be to give a better deal to local communities. In the latest RSG settlement we are told that there will be a reduction in the aggregate Exchequer grant of 2·2 per cent., from 69·2 to 67 per cent., which is the equivalent of an average rate increase in Wales of 11p in the pound, or 6·5 per cent.
The block grant, which is the main rate support for Welsh local authorities, has been increased by only £12 million, or 1·5 per cent., which, when measured against the increase in the total expenditure provision, is a reduction of £30 million, or 3·5 per cent. — the equivalent of a 6 per cent. increase in rates in Wales for 1985–86.
So persuasive have the Government been in influencing local government expenditure, and so great is their confidence in that influence, that they have resorted to setting targets enforceable by penalties. Those penalties have been retained in this RSG settlement. Indeed, they have been increased, from 40 per cent. and 90 per cent. of excess expenditure in 1984–85 to an average of 150 per cent. in 1985–86—namely 100 per cent. for the first 1 per cent. excess, 200 per cent. for the next 1 per cent. and 150 per cent. thereafter—while the limiter on the effect of penalties for low rateable value authorities has been halved. As my hon. Friend the Member for Alyn and Deeside (Mr. Jones) said, that is resented by local authorities.
There is much more that could be said on this subject, but the time available to us in the debate is limited. In fairness to my hon. Friends who wish to make contributions, I shall bring my remarks to a conclusion. In this matter, as in so many others for which he has responsibility in Wales, the Secretary of State is failing Wales and the Welsh people. How much longer have we to wait before he goes?

11 pm

Mr. Ian Grist: Little would one have thought from the speech of the hon. Member for Neath (Mr. Coleman) that after deducting the national insurance surcharge from the Manpower Services Commission's contributions to the higher education budget, the grant has been increased by about 5 per cent. I do not think that he has spotted that, although it was referred to by my right hon. Friend the Secretary of State at the outset of his remarks.
It is worth looking back to last year's debate on the same issue, which continued for rather longer than, thankfully, this one will. Labour Members gave terrible warnings to the people of Wales during that debate of what would happen in the following 12 months. Most of their predictions fell flat on their faces. Rates did not rise to the extent that we were promised and old people's homes were not closed as they threatened. People were not left without a meals-on-wheels service, although we were told that that would happen. None of these things occurred. However, we were not warned of the devastating effect on the economy of Wales, especially south Wales, of the miners' strike, which is ardently supported by most Labour Members. The strike has damaged local life and the capacity of the British community to raise finance, because it has deducted 1 per cent. from the growth of the nation in the past 12 months. That 1 per cent. of growth could have been used to fund the causes which we all want to support—

Mr. Ron Davies: Can you advise me, Mr. Deputy Speaker, whether the comments that the hon. Gentleman is making on the miners strike—

Mr. Grist: Is this a point of order, or is it an intervention?

Mr. Deputy Speaker (Mr. Harold Walker): Order. Mr. Grist.

Mr. Grist: The hon. Member for Caerphilly (Mr. Davies) obviously has a sore conscience on this issue, and it is one that he well deserves.
The settlement that we are debating will be a major contributor to reducing inflation and inflationary


expectations. That will be its major contribution to the future of the Welsh economy and the people of Wales. We must reject the idea that 5 per cent. is a reasonable rate of inflation. At 5 per cent., the value of the pound halves in 14 years. If inflation is 10 per cent., its value will be halved in seven years. We must realise that 5 per cent. is a sharp level of inflation and one that a few years ago we would have considered a disgrace. We must reject the expectation of high inflation and the consequent costs. If we can hold down inflation to 3 per cent. this year, 1 per cent. next year and a flat rate the year after, so much the better for pay claims, the attraction of Wales to foreign industry and our own industry and the support of jobs in our constituencies.
I hope that my right hon. Friend the Secretary of State will be pleased to hear that the rate poundage in Cardiff is not likely to rise by the 5·5 per cent. which his figures suggest. We might very well undershoot 5·5 per cent., and Cardiff is one of the areas that is predicted to have an inflation rate that is slightly above the average. If the rate poundage does not rise by the percentage that is predicted, so much the better for the capital of Wales.
The hon. Member for Alyn and Deeside (Mr. Jones) was remarkably moderate in his speech. He did not belch the flames that he tried on us last year. Unfortunately, he picked, as did the hon. and learned Member for Montgomery (Mr. Carlile), on the education budget. That budget must take account of problems associated with demographic change. We all know of the figures showing that pupil-teacher ratios have been improving, despite decreases in the number of teachers. Studies should show also that movements in population and demographic shifts must lead to changes. Every hon. Member believes that, unless he is a populist who simply wants to gain every available vote. Everywhere the opening of new schools and the closing of old schools helps us to recognise population movements and structure changes. That process must be carried on.
Because elections will be held next year, some authorities and all political parties are sitting on their hands. I speak as a parent with children in local schools, and I believe that, unless our children have fairer opportunities with a better spread of subjects, some schools, even in the cities, will have to merge. The savings can be considerable, and we must examine that aspect.
Some of the difficulties in schools involving books, pens and paper have been the result of the National Union of Teachers urging higher pay awards than provided for in the original budgets. It is clear from the negotiating position of all parties involved in considering teachers' pay that extra pay above last year's 4·5 per cent. guideline would come straight from the education budgets. That money would otherwise go towards assisting pupils in schools. The penalty must be paid for union intransigence, supported by the Opposition, who always envisage a large political buck being gained from supporting union pay demands. If we can keep down the demands of populists and can lower inflationary expectations — part of the effect will show up in pay rises—so much the better for local authorities, the people they serve, the economy and jobs for our young people.

Mr. Alex Carlile: I remind the Secretary of State, of something said in 1980, at paragraph 103 of the report on the role of the Welsh Office by the Select Committee on Welsh Affairs. The Committee said:
Our conclusion at the end of the inquiry is that, notwithstanding the actions taken by Government, there exists in Wales not a jobs gap but a jobs chasm into which the economic and social structures of large parts of Wales are in danger of falling. Only a sustained programme of Government assistance to the Principality can prevent this.
That Committee had a majority of Conservative Members. There is a strong feeling in Wales that that advice, based on long and considered evidence, has been totally ignored and that the Secretary of State and his colleagues, while they swan around opening showpieces, do not look at what is really happening—in housing, transport, education, industry, employment, agriculture and items such as the collection of refuse, water and sewerage. They just do not know what is going on.
It is a disgrace to hear the Secretary of State for Wales supported tonight by the hon. Member for Delyn (Mr. Raffan), whose constituency has been so severely damaged by this settlement. Furthermore, it is apparent that the Welsh Office is not averse to being subtly disingenuous about what is happening in Wales. In answer to a question that I asked some days ago about the proposed development of pre-school and nursery education in Wales, the Minister of State said:
Provision for under-fives by local education authorities in Wales is at a high level, some 85 per cent. of 3 and 4 year-olds being catered for.
So far, so good. We are proud of that record. But the hon. Gentleman went on to state:
and Government policy assumes that provision will continue at this level."—[Official Report, 14 January 1985; Vol. 71, c. 23.]
It is absolute humbug to suggest that the Government really believe for one moment that the provision for nursery education could continue at that level with this settlement in mind.
The Powys director of education, in writing to parents who have complained to him about the declining standards in schools and nursery education, is telling them openly that the quality of education in Powys is bound to suffer because of the financial stringencies placed upon it.
I do not believe that the Welsh Office or the Secretary of State could justifiably accuse the Powys education authority of being profligate or of doing anything other than trying to husband its money well and providing a reasonable standard of education. That responsible, nonpolitical education authority is telling the truth about what is happening to education in Wales as a result of this settlement. Standards are being made to fall.
District councils face receiving about 17 million in real terms less than the total of the Welsh district councils' block grant in 1983–84. In real terms total targets have been reduced by 3 per cent. within the past two years. Some of the variations between Welsh local authorities are causing confusion, consternation and a feeling of rank injustice as between one local authority and another. The bottom line of the story is that we have seen a continuous regression of services in Wales since 1981 because of the Government's failure to recognise the conclusion correctly reached by the Select Committee in 1980 to which I referred earlier.
A large part of the problem has arisen from the Welsh Office's reliance on grant-related expenditure assessments as a measure of need. GRE is no longer, if it ever was, a realistic measure of need. It is interesting to note that, while the Government will latch on to anything that the Audit Commission says which enables them to make cuts, they have conveniently sought to avoid the Audit Commission's expressed doubts as to the method of calculation of GRE. The result of the way in which GRE is calculated is that local communities have lost the right to choose through local democracy, as represented in their councils, the balance that they wish to choose between rates and services.
We no longer have local democracy in Wales because of the parameters which are placed upon county and district councils by the Welsh Office and this settlement. In 1980, the Select Committee feared for the state of Wales then. Today, nearly five years later, we must fear seriously for what will be the state of Wales at the end of this Government's term of office.
Surely the time must come soon—though one doubts it with this Secretary of State—when there will be a radical review of the Welsh economy, and when local government will be recognised as one of the realistic means through which the Welsh economy can be revitalised. Surely the time will come when the Welsh Office will be forced to recognise that the limping Welsh economy will have to be regenerated by increased local government support.
We could have debated many issues tonight, but time does not permit us to do so, because many other hon. Members wish to speak. I wished to highlight the truly desperate problem of education. It is high time that we heard the Conservative party confess honestly that it means by its policies, as surely it does, to reduce the quality of education in Wales so that it becomes a second-rate system.

Mr. Peter Hubbard-Miles: I wish to highlight the subjects that the hon. Member for Alyn and Deeside (Mr. Jones) highlighted. He was correct to highlight education, which is by far the largest element in local authority budgets. He was right to single out Mid-Glamorgan, which is the largest shire county in Wales with the largest education budget. He was wrong in portraying Mid-Glamorgan as a county that is disadvantaged in its education budget and lacking in its resources, because Mid-Glamorgan only recently boasted about its expenditure on education, and pointed out that per head of population it spends 10 per cent. more than the average English and Welsh county spends on education. In certain fields it spends vastly more per head of population than the average English and Welsh authority. For example on nursery education it spends 250 per cent. more per head of population than the average English and Welsh county; on primary education it spends 38 per cent. more; on secondary education it spends 11 per cent. more. So the idea that Mid-Glamorgan education is somehow disadvantaged is absolute nonsense.
If Opposition Members are claiming that Mid-Glamorgan is disadvantaged, they are accusing Mid-Glamorgan of gross incompetence and mismanagement of its resources. That may well be the case but, far from being short of resources, in this year the Mid-Glamorgan county council has managed to find £668,000 out of its

educational budget for non-educational purposes — in other words, for supplying free school meals to the children of striking miners. That has been shrouded in the idea that it is for the children of disadvantaged parents, but I wonder whether the free school meals will continue to be provided for those people after the miners' strike is ended. It will be interesting to see whether Mid-Glamorgan continues providing its free meals for all disadvantaged children.
The hon. Member for Alyn and Deeside is somewhat optimistic in suggesting that in the future there will be no need to penalise counties for overspending, because Mid-Glamorgan county council is now deliberately intending to overspend in order to create a sort of mini-Liverpool situation in Wales; in fact, this year it is taking £3 million from its capital account to subsidise its revenue account, and has been warned by its chief officers over the past four years of the need to make reasonable economies in its budget to avoid a serious situation. Only in recent weeks it has been warned that unless it is prepared to accept certain cuts in its budget, next year it will face a very severe situation.
Therefore, far from being disadvantaged and far from not having resources, the Mid-Glamorgan county council's education budget has the resources, but of course it will continue to pretend that it does not have them.

Mr. Ron Davies: May I first make it clear to the hon. Member for Bridgend (Mr. Hubbard-Miles) that Labour Members understand the problem that exists in Mid-Glamorgan. They understand the scale of deprivation and the problems that Mid-Glamorgan has to tackle as an education authority. The very fact that it spends more than the average means that it has greater needs than the average. That is the sole reason for that additional expenditure.
Let me assure the hon. Member for Bridgend that Labour Members do not want to see anyone starving. They do not want to see the children of miners starving. We regard it as a proper charge on the public purse that the children of striking miners should be prevented from the form of starvation that the hon. Gentleman wishes on them.

Dr. John Marek: It is really a question of representation. My hon. Friend has hit the nail on the head, because I have a press release from Clwyd county council which states:
Mr. Raffan"—
the hon. Member for Delyn—
in particular must know that making and repeating misleading statements does not disguise the real truth.
There we have it. Conservaative Members make misleading statements to disguise the privation in the Principality.

Mr. Davies: I welcome that point. With regard to misinterpretation, I should like to take issue with the Secretary of State because I believe that his statement today and his suggestions on Monday have done a disservice not only to the people of Wales but to local government in Wales. I noticed with interest that in the Western Mail on Tuesday this week he suggested that five of the six local authorities in Mid-Glamorgan would be able to reduce their rates. On Tuesday evening he had a dusty reply from the treasurer of Mid-Glamorgan. The South Wales Echo said:


Mr. Ray Lacey, treasurer to Mid-Glamorgan county council, described the Secretary of State's announcement as a 'theoretical exercise which will only serve to confuse ratepayers … What Mr. Edwards does not know—and Mr. Edwards knows that he does not know—is the special circumstances in each local authority.
When the Secretary of State calls in aid independent assessors or objective judgments, perhaps he will accept the advice of the treasurer of the largest local authority in Wales.
With regard to the individual problems of our valley communities, I should like to draw the attention of the Secretary of State to the problem that we have in Rhymney valley. I remind him that between the two years from 1982–83 to 1984–85, the amount of rate support grant that the local authority received per 1,000 head of population fell from £66,750 to £57,000, a reduction in real terms in the amount of money received by that local authority. There was a marginal increase for the county authority. The grant rose from £264,000 to £268,000 over a three-year period, when no provision was made for inflation. Mid-Glamorgan is facing a crisis, which forced it at the end of last year to discontinue swimming instruction for young children. That is the nature of the society that the Secretary of State is creating for us in the valley communities in Mid-Glamorgan.
I should like to refer again to Rhymney valley, because I believe that the Secretary of State is misleading us. I refer him to the figure for 1984–85, the current year. He stated that the coming year's settlement for 1985–86 was good. He realises that it might be an easier settlement than the current year's settlement, but he knows that that settlement was the most punitive that we have seen in local government, certainly in the time that the right hon. Gentleman has been in that office down in Cardiff.
The expenditure in Rhymney valley during the current year will be about £8·417 million. The target set by the Secretary of State for next year, 1985–86, is £8·521 million — a marginal increase. However, if the right hon. Gentleman compares the expenditure that that local authority is likely to incur in 1985–86 on the basis of its expenditure in the current year, he will realise that there is a shortfall approaching £500,000. If the local authority attempts to meet that shortfall, if it goes 3 per cent., 4 per cent. or 5 per cent. over target, the right hon. Gentleman will take a further £500,000 of rate support grant away from it, thus forcing it into a crisis.
The Secretary of State may say that it is easy enough for the local authority to make adjustments, that it can trim a bit here and a bit there, but the fact is that it cannot do so, because local authorities have been forced to cut back time and again, year after year, by the successive settlements from the right hon. Gentleman. We are no longer cutting back on luxuries—we are cutting back on essentials. Therefore, the local authority in Rhymney valley, with 60 per cent. of expenditure on personnel and related matters, is forced to take the decision to sack people if it wishes to meet the targets. If it sacks people, it will achieve two things. It will increase the level of unemployment in our valley and it will mean that we have fewer services. That is the accusation that the Secretary of State has to answer.
I make one further accusation against the Secretary of State. The relationship between central and local government has been based on a contract that local

government's responsibility is to improve services and central Government's responsibility is to help local government to meet the bill. The Government have broken that contract, and the responsibility for that rests on the shoulders of the Secretary of State.

Mr. Dafydd Wigley: District councils throughout Wales have an enormous problem arising from this settlement, which relates once again to the lack of finance to abide by the promises made for renovation grants for houses. People who will be waiting for another year, two years or three years can thank the Secretary of State for that.
Some councils such as the Dwyfor council in my constituency have enormous problems with capital allocation. To meet their statutory responsibilities, they will have to spend the entirety of their capital allocation on refuse disposal equipment, and they will have nothing left for anything else. That is the magnitude of the problem.
I want to concentrate on the situation facing the counties, particularly Gwynedd. I want to concentrate on the 10 years from 1974 to 1984. In this period, the gross expenditure of the county has increased by only 211 per cent. compared to an expenditure of almost 300 per cent. by central Government. In the same period, the grant from central Government has increased by only 177 per cent. and the ratepayer has been left with an increase of 319 per cent. That is the outcome of the Government's policies. The county has lost the equivalent in current money terms of £9 million in grants from central Government since 1974.
I want to put to the Secretary of State the point that I have put to him before—the unresolved issue of the continuing privations suffered by Gwynedd county council through the formula. The grant-related expenditure generated for Gwynedd is £97·1 million. The target for 1985–86 is only £94·4 million, so the target is £2·5 million less than the Welsh Office recognises to be Gwynedd's needs.
The Secretary of State has repeatedly defended this on the basis that, before he took office, the county did not maintain such a level of services as was shown by the GRE to be justified, so why should it sustain them now? But the Secretary of State knows very well why Gwynedd could not sustain that level of services: it simply did not have have the money. He knows that those services were needed. That is clear from the speeches that he and the hon. Member for Conwy (Mr. Roberts) made during the 1970s when they were in opposition. Gwynedd lost some £4 million between 1974 and 1978. The Secretary of State referred to this with regard to the cuts that were taking place in 1976. As the hon. Member for Pembroke, he said:
In terms of social need and stress, problems are as severe in some Welsh counties as in some metropolitan districts. The rural areas have fared particularly badly. Dyfed and Gwynedd suffer from low incomes, poverty and high unemployment … They also suffer from sparsity of population and have to cater for an annual influx of tourists for which sufficient allowance is not made in the present formula. Yet these counties are among the worst sufferers under the system of distribution that the Government have imposed.
In other words, the Secretary of State at that stage recognised the need for greater expenditure on services in a county such as Gwynedd. But what did he do? When it came to the rates, he said:


To many, this further imposition of rates will come as a final straw, and they will go out of business."—[Official Report, 22 December 1976; Vol. 923, c. 840–2.]
He fought hard against the increase of rates.
If one needs the services and one cannot have the increase in rates, there is only one logical conclusion: the money has to come from central grants. It is that logic that Gwynedd is putting back to the Secretary of State now. In order to get the money that is needed to sustain the services that he and the Government recognise as being necessary through the GRE, there must be a great contribution from central Government.
The hon. Member for Conwy repeated this plea in 1977. He implored the counties not to exceed the 10 per cent. ceiling in rate increases at that time because of the effect that it would have on other people. He said that
even though that will probably mean cutting services to the bone"— [Official Report, 15 December 1977; Vol. 941, c. 1021.]
he wanted a reduction in rate increases. That is fair enough, but if these services are needed and the counties cannot get them from anywhere else, provision should be made for them from central Government money.
That could have been achieved this year if the 4 per cent. limit had not been applied to the increase in target from 1984–85 to 1985–86. Gwynedd could then have increased the £94 million to £96·2 million and been much closer to target. I implore the Secretary of State yet again to ensure in the next 12 months that the target and GREA for Gwynedd are the same so that we can achieve the services that we need.

Mr. Roy Hughes: Having listened to the Secretary of State today, I tend to agree with the Welsh Office of the Association of District Councils that the settlement must be regarded as a lost opportunity to provide resources to revitalise the Welsh economy.
In the Secretary of State's handling of these matters the weakest invariably go to the wall. For instance, his favourite target is Mid-Glamorgan—an attitude in which he seems to be supported by the hon. Member for Bridgend (Mr. Hubbard-Miles)—which is probably the most deprived county in the whole of Great Britain, with astronomical unemployment figures, appalling housing which has affected life expectancy, an ageing population and social services strained to breaking point. With all those difficulties, the county might reasonably have expected a sympathetic hearing from the Government, but all that it gets are exhortations to cut the rates and threats of new and further penalties if it does not.
Thousands of disabled people are waiting for specialist conversion work on their homes, but Government cuts have left local authorities too short of money. In Newport alone more than 500 disabled people are now waiting for adaptations to their homes, ranging from stairlifts and bathroom conversions to ramps and handrails, but the cash is simply not available due to the Government's Scrooge-like attitude. That situation applies throughout Wales. It is no wonder that Mr. Joe Hennessy, secretary of the Wales Council for the Disabled, has written to the Secretary of State demanding urgent action.
Councillor Lloyd Turnbull, leader of Gwent county council, wrote to the Secretary of State on 10 January—I understand that the chief executive, Mr. Perry, has written in similar terms—complaining about the jiggery-pokery involving £4·6 million that the authority believes

is due to the county. Councillor Turnbull expressed surprise at the statement by the Secretary of State in December that, taking everything into consideration, rate increases should be about 4·5 per cent., as Gwent will actually receive less grant in cash terms in 1985–86 than it received in 1984–85. If the block grant is calculated at the same percentage as in 1984–85, however, the county would receive an additional £4·6 million. As that loss is equivalent to 10·5p in rate precept requirement, how can the council be expected to keep the rate increase down to 4·5 per cent. when services have already been cut to the bone?
The rate support grant provides the wherewithal for local government to carry out its essential functions in the community. Our local authorities realise that the Government are engaged in a cost-cutting exercise. Recently, for instance, in answer to a parliamentary question from my hon. Friend the Member for Alyn and Deeside (Mr. Jones), the Secretary of State was forced to admit that since 1981–82 the amount received by our local authorities in rate support grant had declined by £65·7 million. That financial stringency has posed all manner of problems for our local authorities, which have to provide and operate the essential services.
Criticism is no longer confined to Labour-controlled local authorities. Only last week Councillor Parker, leader of Monmouth district council, which is heavily dominated by the Conservatives, warned his own Government of a coming revolt among Conservative councils over what he called the horrendous situation in local government. He asked, "What the hell are the Welsh Office and the Government doing to us?" I have no wish to embellish those words. To do so would be to gild the lily.
Finally, I endorse the criticism of the Secretary of State's presentation of the settlement. The fact that a second document, amending the first, had to be circulated is almost without precedent. It adds to the failure of the Secretary of State in so many other areas. In the eyes of the people of Wales, the right hon. Gentleman stands condemned.

Mr. Nicholas Edwards: The hon. Member for Meirionnydd Nant Conwy (Mr. Thomas) asked me about national park grant. National park supplementary grant has been increased by 5·25 per cent., and the overall level of accepted expenditure on which grant is paid has been increased by 6·8 per cent. in the current year.
The hon. Member for Caernarfon (Mr. Wigley) referred to Gwynedd. I have just written to him on the subject. I have pointed out that because of the problems to which he referred, Gwynedd, at £406 a head, has the fourth highest target of any authority in England or Wales. Its share of the Welsh rate support grant system has been increased, and it has been able to increase its current expenditure since 1981–82 by more than the rate of general inflation. Those are all signs that are moving towards meeting some of the problems of Gwynedd.
The hon. Members for Alyn and Deeside (Mr. Jones) and for Neath (Mr. Coleman) and the hon. and learned Member for Montgomery (Mr. Carlile) said a great deal about the contribution that local government could make to the economy and about the Welsh share of that contribution. If they argue that the settlement fails to take account of the need for economic regeneration, I am entitled to point out various facts. The settlement


represents a 5 per cent. increase in expenditure and grant above the expenditure rate. The target per head in Wales is 21 per cent. higher than the target per head in England, because of the problems of the Principality. The net capital provision per head is 50 per cent. higher than it is in England, because there is in Wales a better record of control of expenditure by local government in Wales. We are likly to produce average rate increases of not much more than the general level of inflation, and that will make a substantial and significant contribution to economic recovery.

Mr. Gwilym Jones: If I were to tell my right hon. Friend that the rate in Cardiff is likely to be the lowest in Wales, and possibly the lowest in Britain, would he agree that that is the best possible advertisement to encourage people to relocate there?

Mr. Edwards: Yes. My hon. Friend the Member for Cardiff, Central (Mr. Grist) made the same point. That is the real contribution that can be made to the recovery of the economy.
The hon. Member for Alyn and Deeside complained about rotten housing, but the Government of which he was a member spent £58 million on housing improvement in Wales in five years, whereas we spent £107 million in one year. His record is no basis on which to make such criticisms.
We have heard much about the problems of Mid-Glamorgan. Because those problems are understood and recognised, it has the third highest target per head in England and Wales. If it was setting out to tackle the problems that were described, it should not have increased its manpower by 1·8 per cent. since 1981.
We have heard many complaints about transferring the burden of supporting local government from the taxpayer to the ratepayer. However, I note that the Committee of Welsh District Councils does not dissent from the Government's policy of reducing the taxpayers' contribution, and I welcome that.
The hon. and learned Member for Montgomery and the hon. Member for Caerphilly (Mr. Davies) talked about education. I am entitled to tell the hon. and learned Member for Montgomery that, in primary education, expenditure per head in Powys has increased by more than 13 per cent. since 1979–80 and that expenditure on secondary pupils has increased by more than 11 per cent. during the same period. There has therefore been a substantial increase in expenditure in real terms in Powys. Exactly the same is true for Mid-Glamorgan. The hon. Member for Rhondda (Mr. Rogers) recently tabled a question asking for information about expenditure per head in the counties of Wales and I gave him the answer. Expenditure has increased in Mid-Glamorgan as well, and is now at its highest level ever.

Mr. Allan Rogers: If the Secretary of State wants to quote figures to the House, will he say on what basis the figures are calculated? Are they calculated on a 1979 basis, or on some other one?

Mr. Edwards: They are calculated on the basis on which the hon. Gentleman asked his parliamentary question. I answered that question. They are expressed in 1983–84 prices. Expenditure per head on primary school

pupils in 1979–80 was £639, and £788 in 1983–84. For secondary education it was £880 per pupil in 1979–80, and £979 in 1983–84. We should not therefore have all this nonsense about the devastation of education.
My hon. Friends the Members for Cardiff, Central and for Delyn (Mr. Raffan) rightly emphasised the importance of low rates to industrial recovery. My hon. Friend the Member for Delyn was criticised by the hon. Member for Neath for daring to make some critical comments about his county council and suggesting that it might call in consultants to improve efficiency. The hon. Member for Neath has an odd concept of the role of a Member of Parliament if he believes that his sole duty is to act as a mouthpiece for his county council.
The hon. Gentleman complained about interference with local government, but I think I am entitled to point out that the taxpayer still produces 67 per cent. of the cost of local government in Wales. Partly because of our low rateable values, and partly because of the good record of local government in Wales, that share has fallen by less than the reduction in England, where the contribution from the central taxpayer is 48·7 per cent. Once again that gives the lie to the allegation that in some way I or the Welsh Office have failed the people in Wales.
The Welsh Office of the Association of District Councils has admitted that this is a fair settlement. It is a good settlement, and I commend it to the House.

Question put:—

The House divided: Ayes 318, Noes 179.

Division No. 68]
[11.45 pm


AYES


Adley, Robert
Butterfill, John


Aitken, Jonathan
Carlisle, John (N Luton)


Alexander, Richard
Carlisle, Kenneth (Lincoln)


Amess, David
Carlisle, Rt Hon M. (W'ton S)


Ancram, Michael
Carttiss, Michael


Arnold, Tom
Cash, William


Ashby, David
Chalker, Mrs Lynda


Aspinwall, Jack
Channon, Rt Hon Paul


Atkins, Robert (South Ribble)
Chapman, Sydney


Baker, Rt Hon K. (Mole Vall'y)
Chope, Christopher


Baker, Nicholas (N Dorset)
Churchill, W. S.


Baldry, Tony
Clark, Dr Michael (Rochford)


Banks, Robert (Harrogate)
Clark, Sir W. (Croydon S)


Batiste, Spencer
Clarke, Rt Hon K. (Rushcliffe)


Bellingham, Henry
Cockeram, Eric


Bendall, Vivian
Colvin, Michael


Bevan, David Gilroy
Conway, Derek


Biffen, Rt Hon John
Cope, John


Blackburn, John
Corrie, John


Blaker, Rt Hon Sir Peter
Couchman, James


Body, Richard
Cranborne, Viscount


Bonsor, Sir Nicholas
Crouch, David


Bottomley, Peter
Currie, Mrs Edwina


Bottomley, Mrs Virginia
Dickens, Geoffrey


Bowden, A. (Brighton K'to'n)
Dorrell, Stephen


Bowden, Gerald (Dulwich)
Douglas-Hamilton, Lord J.


Boyson, Dr Rhodes
Dover, Den


Braine, Rt Hon Sir Bernard
Dunn, Robert


Brandon-Bravo, Martin
Durant, Tony


Bright, Graham
Edwards, Rt Hon N. (P'broke)


Brinton, Tim
Eggar, Tim


Brittan, Rt Hon Leon
Emery, Sir Peter


Brooke, Hon Peter
Evennett, David


Brown, M. (Brigg &amp; Cl'thpes)
Eyre, Sir Reginald


Browne, John
Fairbairn, Nicholas


Bruinvels, Peter
Fallon, Michael


Bryan, Sir Paul
Farr, Sir John


Bulmer, Esmond
Favell, Anthony


Burt, Alistair
Fenner, Mrs Peggy


Butcher, John
Finsberg, Sir Geoffrey


Butler, Hon Adam
Fletcher, Alexander






Fookes, Miss Janet
Latham, Michael


Forman, Nigel
Lawler, Geoffrey


Forsyth, Michael (Stirling)
Lawrence, Ivan


Forth, Eric
Lee, John (Pendle)


Fowler, Rt Hon Norman
Leigh, Edward (Gainsbor'gh)


Fox, Marcus
Lennox-Boyd, Hon Mark


Franks, Cecil
Lester, Jim


Fraser, Peter (Angus East)
Lewis, Sir Kenneth (Stamf'd)


Freeman, Roger
Lightbown, David


Gale, Roger
Lilley, Peter


Galley, Roy
Lloyd, Ian (Havant)


Gardiner, George (Reigate)
Lloyd, Peter, (Fareham)


Gardner, Sir Edward (Fylde)
Lord, Michael


Garel-Jones, Tristan
Lyell, Nicholas


Gilmour, Rt Hon Sir Ian
McCrindle, Robert


Glyn, Dr Alan
McCurley, Mrs Anna


Goodlad, Alastair
Macfarlane, Neil


Gorst, John
MacGregor, John


Gow, Ian
MacKay, Andrew (Berkshire)


Gower, Sir Raymond
MacKay, John (Argyll &amp; Bute)


Grant, Sir Anthony
Maclean, David John


Greenway, Harry
McNair-Wilson, P. (New F'st)


Gregory, Conal
Major, John


Griffiths, Peter (Portsm'th N)
Malins, Humfrey


Grist, Ian
Malone, Gerald


Ground, Patrick
Maples, John


Grylls, Michael
Marland, Paul


Gummer, John Selwyn
Marlow, Antony


Hamilton, Hon A. (Epsom)
Marshall, Michael (Arundel)


Hamilton, Neil (Tatton)
Mates, Michael


Hampson, Dr Keith
Mather, Carol


Hanley, Jeremy
Maude, Hon Francis


Hannam, John
Mawhinney, Dr Brian


Hargreaves. Kenneth
Mayhew, Sir Patrick


Harris, David
Mellor, David


Harvey, Robert
Meyer, Sir Anthony


Haselhurst, Alan
Miller, Hal (B'grove)


Havers, Rt Hon Sir Michael
Mills, Iain (Meriden)


Hawkins, C. (High Peak)
Mills, Sir Peter (West Devon)


Hawkins, Sir Paul (SW N'folk)
Mitchell, David (NW Hants)


Hawksley, Warren
Moate, Roger


Hayes, J.
Monro, Sir Hector


Hayhoe, Barney
Montgomery, Sir Fergus


Hayward, Robert
Morrison, Hon C. (Devizes)


Heathcoat-Amory, David
Moynihan, Hon C.


Henderson, Barry
Mudd, David


Hickmet, Richard
Murphy, Christopher


Hicks, Robert
Neale, Gerrard


Higgins, Rt Hon Terence L.
Needham, Richard


Hind, Kenneth
Neubert, Michael


Hogg, Hon Douglas (Gr'th'm)
Newton, Tony


Holland, Sir Philip (Gedling)
Nicholls, Patrick


Holt, Richard
Norris, Steven


Hordern, Peter
Onslow, Cranley


Howard, Michael
Oppenheim, Phillip


Howarth, Alan (Stratf'd-on-A)
Oppenheim, Rt Hon Mrs S.


Howarth, Gerald (Cannock)
Osborn, Sir John


Howell, Rt Hon D. (G'ldford)
Ottaway, Richard


Howell, Ralph (N Norfolk)
Page, Richard (Herts SW)


Hubbard-Miles, Peter
Parkinson, Rt Hon Cecil


Hunt, David (Wirral)
Parris, Matthew


Hunt, John (Ravensbourne)
Patten, Christopher (Bath)


Hunter, Andrew
Patten, John (Oxford)


Jackson, Robert
Pawsey, James


Jenkin, Rt Hon Patrick
Percival, Rt Hon Sir Ian


Johnson Smith, Sir Geoffrey
Pollock, Alexander


Jones, Gwilym (Cardiff N)
Portillo, Michael


Jones, Robert (W Herts)
Powell, William (Corby)


Jopling, Rt Hon Michael
Powley, John


Joseph, Rt Hon Sir Keith
Price, Sir David


Kellett-Bowman, Mrs Elaine
Proctor, K. Harvey


Key, Robert
Raffan, Keith


Kilfedder, James A.
Raison, Rt Hon Timothy


King, Roger (B'ham N'field)
Rathbone, Tim


King, Rt Hon Tom
Rees, Rt Hon Peter (Dover)


Knight, Gregory (Derby N)
Renton, Tim


Knight, Mrs Jill (Edgbaston)
Rhodes James, Robert


Knowles, Michael
Rhys Williams, Sir Brandon


Knox, David
Ridley, Rt Hon Nicholas


Lamont, Norman
Roberts, Wyn (Conwy)





Robinson, Mark (N'port W)
Thomas, Rt Hon Peter


Robinson, P. (Belfast E)
Thompson, Donald (Calder V)


Roe, Mrs Marion
Thompson, Patrick (N'ich N)


Rowe, Andrew
Thornton, Malcolm


Rumbold, Mrs Angela
Thurnham, Peter


Ryder, Richard
Townend, John (Bridlington)


Sackville, Hon Thomas
Townsend, Cyril D. (B'heath)


Sainsbury, Hon Timothy
Tracey, Richard


Sayeed, Jonathan
Trippier, David


Scott, Nicholas
Twinn, Dr Ian


Shaw, Giles (Pudsey)
van Straubenzee, Sir W.


Shelton, William (Streatham)
Viggers, Peter


Shepherd, Colin (Hereford)
Waddington, David


Silvester, Fred
Waldegrave, Hon William


Sims, Roger
Walden, George


Skeet, T. H. H.
Walker, Bill (T'side N)


Smith, Tim (Beaconsfield)
Waller, Gary


Soames, Hon Nicholas
Walters, Dennis


Speed, Keith
Ward, John


Speller, Tony
Wardle, C. (Bexhill)


Spence, John
Warren, Kenneth


Spencer, Derek
Watson, John


Spicer, Jim (W Dorset)
Watts, John


Squire, Robin
Wells, Sir John (Maidstone)


Stanbrook, Ivor
Wheeler, John


Stanley, John
Whitfield, John


Steen, Anthony
Whitney, Raymond


Stern, Michael
Wiggin, Jerry


Stevens, Lewis (Nuneaton)
Wilkinson, John


Stevens, Martin (Fulham)
Winterton, Mrs Ann


Stewart, Allan (Eastwood)
Winterton, Nicholas


Stewart, Andrew (Sherwood)
Wolfson, Mark


Stewart, Ian (N Hertf'dshire)
Wood, Timothy


Stokes, John
Woodcock, Michael


Stradling Thomas, J.
Young, Sir George (Acton)


Sumberg, David
Younger, Rt Hon George


Tapsell, Sir Peter



Taylor, Teddy (S'end E)
Tellers for the Ayes:


Temple-Morris, Peter
Mr. Robert Boscawen and


Terlezki, Stefan
Mr. Ian Lang.




NOES


Adams, Allen (Paisley N)
Cook, Frank (Stockton North)


Alton, David
Cook, Robin F. (Livingston)


Anderson, Donald
Corbett, Robin


Ashdown, Paddy
Corbyn, Jeremy


Ashton, Joe
Cowans, Harry


Atkinson, N. (Tottenham)
Craigen, J. M.


Banks, Tony (Newham NW)
Crowther, Stan


Barnett, Guy
Cunningham, Dr John


Barron, Kevin
Dalyell, Tam


Beckett, Mrs Margaret
Davies, Rt Hon Denzil (L'lli)


Beith, A. J.
Davies, Ronald (Caerphilly)


Bell, Stuart
Davis, Terry (B'ham, H'ge H'l)


Benn, Tony
Deakins, Eric


Bennett, A. (Dent'n &amp; Red'sh)
Dewar, Donald


Bermingham, Gerald
Dixon, Donald


Bidwell, Sydney
Dobson, Frank


Boothroyd, Miss Betty
Dormand, Jack


Boyes, Roland
Douglas, Dick


Bray, Dr Jeremy
Dubs, Alfred


Brown, Gordon (D'f'mline E)
Dunwoody, Hon Mrs G.


Brown, Hugh D. (Provan)
Eadie, Alex


Brown, N. (N'c'tle-u-Tyne E)
Eastham, Ken


Brown, R. (N'c'tle-u-Tyne N)
Evans, John (St. Helens N)


Brown, Ron (E'burgh, Leith)
Ewing, Harry


Bruce, Malcolm
Fatchett, Derek


Buchan, Norman
Faulds, Andrew


Caborn, Richard
Field, Frank (Birkenhead)


Callaghan, Jim (Heyw'd &amp; M)
Fields, T. (L'pool Broad Gn)


Campbell-Savours, Dale
Fisher, Mark


Canavan, Dennis
Flannery, Martin


Carlile, Alexander (Montg'y)
Forrester, John


Cartwright, John
Foulkes, George


Clark, Dr David (S Shields)
Fraser, J. (Norwood)


Clarke, Thomas
Freeson, Rt Hon Reginald


Clay, Robert
Garrett, W. E.


Clwyd, Mrs Ann
George, Bruce


Cohen, Harry
Gilbert, Rt Hon Dr John


Coleman, Donald
Godman, Dr Norman






Gould, Bryan
O'Brien, William


Hamilton, James (M'well N)
Orme, Rt Hon Stanley


Hancock, Mr. Michael
Parry, Robert


Harrison, Rt Hon Walter
Patchett, Terry


Hart, Rt Hon Dame Judith
Pavitt, Laurie


Hattersley, Rt Hon Roy
Pendry, Tom


Haynes, Frank
Penhaligon, David


Hogg, N. (C'nauld &amp; Kilsyth)
Pike, Peter


Holland, Stuart (Vauxhall)
Powell, Raymond (Ogmore)


Home Robertson, John
Prescott, John


Howells, Geraint
Radice, Giles


Hoyle, Douglas
Randall, Stuart


Hughes, Robert (Aberdeen N)
Redmond, M.


Hughes, Roy (Newport East)
Rees, Rt Hon M. (Leeds S)


Hughes, Sean (Knowsley S)
Richardson, Ms Jo


Hughes, Simon (Southwark)
Roberts, Ernest (Hackney N)


Janner, Hon Greville
Robertson, George


John, Brynmor
Rogers, Allan


Johnston, Russell
Rooker, J. W.


Jones, Barry (Alyn &amp; Deeside)
Ross, Stephen (Isle of Wight)


Kaufman, Rt Hon Gerald
Rowlands, Ted


Kennedy, Charles
Sheerman, Barry


Kirkwood, Archy
Sheldon, Rt Hon R.


Lambie, David
Shore, Rt Hon Peter


Lamond, James
Short, Ms Clare (Ladywood)


Leadbitter, Ted
Short, Mrs R.(W'hampt'n NE)


Leighton, Ronald
Silkin, Rt Hon J.


Lewis, Ron (Carlisle)
Skinner, Dennis


Lewis, Terence (Worsley)
Smith, C.(Isl'ton S &amp; F'bury)


Litherland, Robert
Smith, Rt Hon J. (M'kl'ds E)


Lloyd, Tony (Stretford)
Snape, Peter


Lofthouse, Geoffrey
Soley, Clive


McCartney, Hugh
Spearing, Nigel


McDonald, Dr Oonagh
Steel, Rt Hon David


McGuire, Michael
Stott, Roger


McKay, Allen (Penistone)
Strang, Gavin


McKelvey, William
Straw, Jack


McTaggart, Robert
Thomas, Dafydd (Merioneth)


McWilliam, John
Thompson, J. (Wansbeck)


Madden, Max
Thorne, Stan (Preston)


Marek, Dr John
Tinn, James


Marshall, David (Shettleston)
Torney, Tom


Maxton, John
Wallace, James


Maynard, Miss Joan
Wardell, Gareth (Gower)


Meacher, Michael
Welsh, Michael


Meadowcroft, Michael
Wigley, Dafydd


Michie, William
Williams, Rt Hon A.


Mikardo, Ian
Winnick, David


Millan, Rt Hon Bruce
Woodall, Alec


Miller, Dr M. S. (E Kilbride)



Mitchell, Austin (G't Grimsby)
Tellers for the Noes:


Morris, Rt Hon A. (W'shawe)
Dr. Roger Thomas and


Nellist, David
Mr. Lawrence Cunliffe.


Oakes, Rt Hon Gordon

Question accordingly agreed to.

Resolved,
That the Welsh Rate Support Grant Report 1985–86 (House of Commons Paper No. 100), which was laid before this House on 12th December, be approved.

WELSH RATE SUPPORT GRANT REPORT 1985–86 (AMENDMENT)

Resolved,
That the Welsh Rate Support Grant Report 1985–86 (Amendment) Report (House of Commons Paper No. 147), which was laid before this House on 10th January, be approved.—[Mr. Nicholas Edwards.]

Wildlife (Northern Ireland)

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Chris Patten): I beg to move,
That the draft Wildlife (Northern Ireland) Order 1984, which was laid before this House on 22nd November, be approved.
This order, like the other which the House is to debate this evening, has benefited from the Assembly's scrutiny. A number of changes for the better have been included in it as a result.
I am particularly pleased to bring forward this proposal, as it represents the first comprehensive wildlife law for Northern Ireland. Northern Ireland's geographical separation from the rest of Europe has obviously been a constraint on the variety of its wildlife. It is therefore essential to protect what we have. The provisions will protect many species of wildlife. These correspond to the Wildlife and Countryside Act 1981 which brought the law in Great Britain into line with four international agreements entered into by the Government of the United Kingdom—the EEC directive on the conservation of wild birds, the Berne convention on the conservation of European wildlife and natural habitats, the Ramsar convention, which is concerned with the establishment and protection of internationally important wetlands, and the Bonn convention on the conservation of migratory species of wild animals. Part I of the Wildlife and Countryside Act and the Deer Acts 1963 to 1980 are the main sources of the draft order.
The order is in four parts. The first is procedural and deals with the title and commencement of the order. Part II relates to the protection of birds and other wild creatures and plants. The provisions relating to wild birds cover articles 4 to 9. The EEC directive contains the basic premise that all birds, their nests and eggs shall be fully protected and that requirement is achieved in article 4. Control of bird species is obviously essential, for example, in relation to pest birds which can be damaging to activities such as agriculture, and the birds which have traditionally been used for sport or food or both. The necessary exceptions can be found in article 5, although inhumane methods of killing and taking of such wild birds are banned by virtue of article 6, which restates the existing law on wild birds' protection in relation to the prohibition of traps, snares, hooks and nets and includes several new methods proscribed under the EEC directive. An additional provision has been added since the proposal was published for consultation, making it an offence for a landowner to permit or allow the use of these prohibited methods on his land. That provision is repeated later in the order in connection with wild animals.
Article 7 deals with the sale of live or dead wild birds. The sale of any live wild bird is prohibited entirely and only one species of dead wild bird may be sold—the wood pigeon. Regulations will be made, however, to permit certain individuals—taxidermists in the main—to trade in dead species. There is a later similar article on animals.
Under article 9 it will be an offence for any person to be involved in any event where captive birds are freed to be shot or hunted by trained birds of prey immediately after their liberation. That offence is a substantive change made since the proposal was published. The practice is apparently growing in some European countries and this


provision, which is not included in the Wildlife and Countryside Act 1981, is designed to prevent its spread to Northern Ireland.
Provisions on the protection of other animals begin with article 10. Creatures such as the badger, pine marten, otter, red squirrel and certain butterflies are protected for the first time. A full list of protected creatures is contained in schedule 5. There must, of course, be exceptions—allowed for in article 11 — to safeguard domestic livestock, crops and other forms of property. In article 10 there is a further change from the published order. The protection afforded to structures or places used by wild animals for shelter has been extended to cover also anything that conceals or protects them. That change was made in the light of the difficulty experienced by the Nature Conservancy Council in interpreting the corresponding provision in the 1981 Act.
Article 12 prohibits the use of inhumane methods of killing and taking wild animals, and the ban on the use of self-locking snares has been reinforced by a new provision prohibiting their sale.
The special protection of plants is contained in article 14. In view of the possible difficulties in enforcing these particular provisions, it is my firm intention that there should be the widest publicity to impress on the public the importance of leaving the countryside as they find it. the provision is not entirely restrictive. The picking of wild flowers, apart from those in the specially protected category, is still permitted, but for obvious reasons it is an offence to uproot or destroy any wild plant.
Article 15 deals with the introduction of new species. There are two main reasons why introductions require strict control. First, foreign species may thrive and spread rapidly because of the lack of competition. Like the grey squirrel and the mink, they may then cause damage to trees, livestock or other forms of property. I think that that has been a problem in parts of County Tyrone. Secondly, they may cause the number of our native species to decline by competing for their food and space. The presence of American mink in Northern Ireland is an expensive reminder of how an introduction can be harmful both to property and to wildlife. The penalties for an offence under this article are high and reflect the need for tight controls on non-native species of plants and animals.
Article 16 deals with the establishment of wildlife refuges under which, for example, bird sanctuaries may be designated by order. The provisions of this article will not override the existing statutory rights of landowners as designations will only be through agreement.
The licensing provisions of the order are contained in article 18. There is a substantial list of activities that may be carried on that are otherwise in contravention of the provisions of the order, provided they are done under and in accordance with a licence issued by the Department of the Environment. It is intended that the administrative costs of issuing licences will be partially offset by a suitable charging system.
In this article there is a further change from the published order in that a licence relating to the killing of a species will require to specify the particular species which may be killed and the person authorised to do so. This tighter control is felt to be justified in such circumstances.
Part III of the order covering articles 19 to 23 relates to deer. During the late 1970s, several unsuccessful Deer Bills were introduced by various private Members at

Westminster, each including the protection of deer in Northern Ireland. The final version. the Deer Act 1980, turned out to be a truncated version of earlier Bills and did not, unfortunately, embrace Northern Ireland. An undertaking was then given by one of my predecessors that the protection of deer would be included in any subsequent wildlife measure in the Province.
Until now, Northern Ireland has had the unenviable distinction of being the only country in western Europe not to have national laws for the protection of deer. The present proposals closely follow those contained in the Deer Acts 1963 to 1980 and cover items such as close seasons, nightly shooting times, prohibited weapons, poaching and the purchase and sales of venison.
Certain exceptions have been provided which will allow for the veterinary treatment of deer and the killing of deer out of season by an authorised person on certain agricultural land and garden grounds. The exceptions provided for deer farmers and for the purpose of protecting any person threatened by a deer have been limited in the former case to specified acts, and in the latter to circumstances where there is an immediate threat and by the application of a standard of reasonableness to the act carried out. This, again, is a change introduced following the consultation process.
Part IV of the order contains the miscellaneous provisions and deals with standard items such as enforcement, summary prosecutions, penalties and forfeitures and regulations, orders and notices. The level of penalties emphasises the gravity with which any breach of the laws on wildlife is and should be regarded.
I am confident that hon. Members will welcome this order as a necessary measure to protect the wildlife heritage of Northern Ireland. It places Northern Ireland on at least an equal footing with the rest of the United Kingdom and gives us a comprehensive code that will meet the requirements of various international agreements to which the United Kingdom is party.
I commend the order to the House.

Mr. Stuart Bell: I commend the Minister on taking us so carefully and succinctly through the order. Hon. Members who represent Northern Ireland constituencies will be as anxious as I am to ensure that provisions which offer protection to additional fauna and flora should be the same in Northern Ireland as they are on the mainland.
The positive aspect of this order is that while it is somewhat overdue — the bird section, for example, should have been in force by April 1983 to comply with the EEC directive on the conservation of wild birds—it offers protection to fauna and flora that were previously unprotected in Northern Ireland.
As the Under-Secretary said, the order brings us into line with our international obligations. Though it is sometimes overlooked, if not forgotten, these apply as much to Northern Ireland as they do to the mainland. Some of these obligations are imposed on us by the EEC, and we are dealing tonight with one such obligation which arises from the application of article 4 of the European directive to which I referred.
Those who take a strong interest in these matters in Northern Ireland are broadly satisfied with the provisions for the protection of the species. Their concern, however, is that the provisions should be fully implemented and that the powers, such as those which exist in article 4(10) to


enable Northern Ireland to join in the special protection measures for, for example, quarry species in cold weather—measures which are currently in force in Great Britain—will not be weakened by any lack of resolve on the part of the Department of the Environment in Northern Ireland. We join the Minister in commending the order to the House.

Rev. Martin Smyth: I give a general welcome to the order and share the opinion of the hon. Member for Middlesbrough (Mr. Bell) that we should appreciate the manner in which the Minister presented it. The Minister talked about the need to preserve wildlife because it may be in peril. I am happy that a similar order was not in force at the time of Patrick, who is alleged to have cleared the snakes out of Ireland. Many of us would like him back with us.
The Assembly has recommended that action should be taken to preserve the Irish hare. I do not think that that was a nationalistic or a Unionist ploy; I believe that the recommendation reflected the concern of the people of Northern Ireland.
The Minister has assured me in a letter that action would be taken on what he described as a "running sore" in Northern Ireland, which is the live coursing at Crebilly. In the Minister's response to the concerns of the people of Northern Ireland, we were told that it was not intended to legislate for the protection of the Irish hare as that came under gaming legislation. However, the hope was expressed that something would be done as soon as possible. Can the Minister say when such a measure might be brought before us? If there was a sense of urgency in bringing the order before the House because of the European directive, there should be an equal sense of urgency to respond to the will of the majority of the Ulster people on an evil form of sport of which few have spoken in support, irrespective of class, politics or creed.

Mr. Peter Robinson: This is perhaps the first time that I have approached this subject in the House, but I have dealt with it for many hours in another place in Northern Ireland. During that process I have been struck by the widespread interest in it, which I, as a public representative, had not detected was so deeply held in the community. For that reason, I welcome the substance of the orders, which include provisions that will protect the flora and fauna and our wildlife. These are matters of primary interest to the people of Northern Ireland. They are interested especially in the conservation of wildlife.
The substance of my remarks is one of welcome, so it is unfortunate that any cloud should appear in the sky, especially a grey one, in taking up the remarks of the hon. Member for Belfast, South (Rev. Martin Smyth) on the practice of enclosed live park hare coursing in Northern Ireland.
Those in this place who do not represent Northern Ireland constituencies may think that hare coursing is hare coursing whether it is in Great Britain, Northern Ireland or even the Republic of Ireland. It is not the same throughout the United Kingdom. Hon. Members should be aware of what park hare coursing in Northern Ireland really is. In Great Britain—I do not argue the merits of

hare coursing there — the rules allow a hare an opportunity to escape that is not available to a hare in Northern Ireland. If a hare in Northern Ireland escapes once, it is recycled and again put through the process. If it escapes the next time, it is recycled and put through the process once more.
I have protested at Crebilly, so I can tell the House about the procedures adopted. The hare does not have a great opportunity to escape. It is given a relatively short start with the hounds following on after it. The hounds can follow the hare into the enclosure and corner it in a smaller and more confined space. The stewards are simply in the area to kick the hare to death rather than see it torn to pieces by the dogs. That is park hare coursing Northern Ireland style. It is more barbaric, cruel and evil than the style practised in the rest of the United Kingdom.
With that background in mind, the Assembly would have considered the proposal for a draft order and the section dealing with the prohibition of certain methods of killing or taking wild animals. It would be appropriate to include a proscription of the use of enclosed park hare coursing.
The political parties in Northern Ireland did not line up with the Unionists on one side of the argument and the Nationalists on the other or with Protestants and Roman Catholics on different sides. There was a degree of agreement that the Minister might like to see in other subjects. With a great deal of agreement, the Members of the Assembly accepted the argument and recommendations presented by the Environment Committee that there should be a ban on enclosed park hare coursing. The Assembly's view was not out of tune with what the people in the country as a whole felt. There was widespread worry about the practice of hare coursing and widespread approval for the Assembly's recommendations.
I support the principle that Northern Ireland politicians should have a role to play in their own affairs. The Assembly has been useful in that it has a scrutinising role and has enabled us to put a bridle on hitherto unaccountable direct rule. The confidence of many people was shaken when they noticed that a proposal which had such widespread acceptance was treated so cavalierly by the Minister's Department. I should have thought that a Tory Minister would have had an excellent opportunity to agree with a proposal that would not cost anything, financially at least.
Some people in Northern Ireland are less generous than I am. If you, Mr. Deputy Speaker, had been in that other place, you might have been alarmed at some of the comments made. One Member said:
The Minister responsible for this decision is either very stupid, very ignorant, or downright deceitful".
He allowed the Minister some grace, because he said:
the latter is the most likely".
Although a constituent might forgive a politician for being deceitful, he could not forgive him for being stupid or ignorant. I do not believe that any of those three descriptions applies. I have noticed over and over that when the subject of park hare coursing has arisen in Northern Ireland, something always stops action. I do not know whether there is an over-abundance of tweedy sorts in the Department of the Environment. Whatever it is, something does not allow the Department to think in the same terms as the majority of the people and elected representatives in Northern Ireland. I wonder whether the Minister can support that activity. When he responded to


the Assembly, he said that there were reasons for not accepting such a ban. He said that the Irish Coursing Club had decided to change its rules and that, with self-regulation, the Assembly might achieve what it sought better than by legislation.
I am not convinced that those who practise barbarity are the best people to regulate it, nor am I convinced that those people who only change the rules when under pressure are likely to keep them when the pressure appears to be off. With self-regulation, they could regulate the rules back to what they were. What is to stop a group that is not affiliated to the Irish Coursing Club from having a meeting similar to Crebilly before self-regulation?
Hon. Members should know what the great changes in the rules at Crebilly are that encouraged the Minister not to go ahead with a ban on park hare coursing. The first change was an increase in the number of stewards who would attend the meeting. I am sure that the hare was impressed by the fact that there would be more stewards to kick it to death when the hounds caught it. If it was not impressed. it would feel the same as Members of the Assembly, who were equally unimpressed.
The other great move was to give the hare a few yards extra start. It would be able to go a few more yards up the course before the hounds killed it. I am sure that the hare was impressed that under the new regulation it would have an extra couple of seconds to live.
The third change in the regulations was that the promoters of the event would clip the ears of the hares that survived after they had gone through the course, so that they could be released within 48 hours of the completion of the event. Neither the Minister nor the ICC has said who will referee such a procedure. The ICC's reaction to the RSPCA's previous request to watch the hares being let into the wild after the events was strange. I suspect that if the ICC is still reluctant to allow supervison of its activities, self-regulation is meaningless.
The Minister has been so impressed by the ICC's generosity in making those three major concessions that he does not feel it necessary to impose a ban. I say that, but I do him an injustice, because in a letter to me he says that he has decided
for the present not to introduce separate legislation.
I seek some clarification from the Minister. He will be aware that the coursing club's rule 13 states:
points are awarded during the course to hounds which do the most to kill the hare.
I am sure that the rules for hare coursing in Northern Ireland are different from those followed in Great Britain. As that rule has not been amended, how long does the Minister intend to allow the review of the ICC's self-regulation to continue before he is prepared to say whether it meets the criterion that he set down when he felt that self-regulation would meet the Assembly's request?
I urge the Minister to say that if the self-regulation does not meet his requirements for hare coursing in Northern Ireland and does not bring it closely into line with hare coursing as practised in Great Britain, he will introduce legislation to ban that barbaric and evil practice in Northern Ireland.
I end as I began, by giving a general welcome at least to that part of the order which appeared at the end of the day. It provides overall a better balance between the interests and responsibilities of the different users of the countryside. But in welcoming the order, I urge the Minister to consider legislation.

Mr. Stephen Ross: As one who sat through the Committee stage of the Wildlife and Countryside Bill, and moved an amendment that the Bill should apply to Northern Ireland, I welcome the order.
Anyone who saw the film on BBC television on Sunday night will appreciate how rich and varied is the wildlife of Ireland, both north and south. It was marvellous to see red squirrels—there are not many left in Britain, but we have them in the Isle of Wight — as well, as pine martens, hares, otters, peregrine falcons, chuffs, bitterns, and even the corncrake, which I think now exists only in the Western Isles. Long may they survive.
Under article 4(10), the Minister is enabled to introduce special protection measures for quarry species, particularly in cold weather. I believe that art this moment his colleagues in the Department of the Environment are thinking of banning wildfowling in Britain because of the prolonged cold weather that we are experiencing. May something similar be considered for Northern Ireland if the cold spell continues for any length of time? The weather may not be as severe in Northern Ireland; others will be able to tell me whether it is or not. But if there is to be a prolonged period of cold weather, that article should be implemented.
I am sorry to see that the curlew and the scaup can be hunted in Northern Ireland, because they are protected in Britain. We had an argument about curlew in Committee on the Wildlife and Countryside Bill. Perhaps the scaup might have been included in the order; I am sorry that it was not. However, I welcome the order and hope that it will be implemented speedily.

Mr. William Ross: I was glad to hear the hon. Member for Isle of Wight (Mr. Ross) refer to an amendment that he moved in Committee on the Wildlife and Countryside Bill. If it had been carried, we should not have had to sit here until 3 am. No doubt many hon. Members on the Government Benches would have been even more pleased if that Liberal amendment had been carried.
The order deals with an enormous number of matters. The hon. Member for Belfast, East (Mr. Robinson) concentrated on one aspect of the order; indeed, that has been the hallmark of the examination of the order. Article 4(10) says that a person who
takes or destroys an egg of any wild bird…shall be guilty of an offence.
Most wild birds' nests are destroyed or interfered with by children—often relatively small children—who go bird-nesting. The practice is not as common now as it was when I was a child, but certainly in regard to small birds that is where the real problem lies.
I suggest that the Minister could approach the education authorities to see what could be done through the schools to relieve pressure on nesting birds from children. If we do not start the process of education when children are young, we shall never get anywhere in that respect.

Mr. Roy Beggs: Will my hon. Friend agree with me that, because of the importance of conveying the contents of the order to schoolchildren, copies should be made readily available to them? We are dependent on the help of teachers in encouraging children to be thoughtful with regard to wildlife. Indeed, we are


very much indebted to organisations such as the Royal Society for the Protection of Birds for the work they do and the literature they circulate.

Mr. Ross: I agree with my hon. Friend. I do not see any reason why the Department of Education and Science should not make material available to schools.
There is an enabling power to restrict shooting in hard weather. I assume that normally any such restriction would apply to the entire Province, yet it is not unknown for the Province to benefit, with regard to game and wildfowl, when there is hard weather in Great Britain or elsewhere in the island of Ireland. I am curious as to whether the Government are thinking of putting a blanket ban on the entire Province, or only on parts of it that might from time to time be affected by hard weather, when the rest of the Province would be clear and shooting could be permitted there. I should be obliged if the Minister told us what the Government's thinking is on that issue.
In article 6 of the order one reads about the means of killing or taking wild birds that are banned. Later it refers to wild animals. One thing that has concerned me very much is the banning of the automatic shotgun. I have not been able to understand why that should be so. I believe that the measure results purely from the EEC directive. I should be greatly obliged if the Minister could give us the benefit of the Government's thinking when they accepted that restriction. There is nothing wrong with an automatic shotgun. My experience, as a user of one, which I fear none of the members of the Assembly Committee are, is that whenever one fires a gun at any target, and misses two shots, one does not waste ammunition firing a third shot because the target is far out of range by that time. In the control of vermin and ferreting rabbits, the automatic shotgun has tremendous advantages over the standard double-barrelled shotgun. I cannot understand why the Government have been so willing to accept that demand from the EEC.
The Minister will appreciate the difficulties, especially in Northern Ireland, when an individual wants to get a second shotgun, and the police are most unwilling to grant a firearms certificate for that weapon. Therefore, the individual who owns an automatic shotgun may be prohibited when the order comes into operation from using that firearm in the taking of wildlife or game, and may find that not only has its market value diminished but that he is incapable of holding it and a second gun. Perhaps the Minister will have a word with the chief constable and his right hon. Friend the Secretary of State about the matter when he is confronted with applications for a second gun.
I also notice that a shotgun that has an internal barrel diameter of more than 1¾ in. is banned. Perhaps the Minister will tell us what bore of shotgun that represents because elsewhere in the order we find references to the size of shot, the bore and so on. Instead of using the same measurements throughout, we seem to hop from one measurement to the other, which is confusing.
The order also refers to the prohibition of
any device for illuminating a target or any sighting device for night shooting".
It may not be known to the House, but several different gadgets can be used for shooting. There is the image intensifier, used by the Army, which is a highly sophisticated piece of equipment and extremely unlikely

to be available to sportsmen. There are things such as the red spot that appears on the target when one has the device mounted on the gun. When one puts the gun to one's shoulder, once the red spot appears on the target, one knows that one is on it. Is that banned? There is also the extremely simple device for shooting duck in the late evening of putting a piece of white paper on the muzzle of the gun so that one can see it. I have used that device and am curious to know whether it would be banned. I wonder whether anyone asked the Minister those questions before, and whether any practical shooting men talked to him about what it is like on the ground when one is trying to bring down game in bad light conditions.
I am also concerned about the release of wild birds to be shot or to be pursued by birds of prey. The Minister has cleared my mind because I was worried that that practice was taking place in Northern Ireland, but has he any evidence that in any place in Northern Ireland or Great Britain the shooting of live birds in place of clay pigeons is still practised? If so, I should be surprised and shocked to hear it because I thought that it died out a long time ago, and I would not like to think that it had been revived.
Another matter that concerned a great many people was the use of the self-locking snare. A great many people have said a great deal about the cruelty of this device. Having listened to the views of a large number of people, and having seen the snare in use, I remain unconvinced by the arguments for banning it. Any snare that is properly set should catch and kill its quarry. The soft, brass-coloured wire used for rabbit snares would tighten up and have much the same effect as a self-locking snare. If the snare is properly used there should be no problems. We are really seeking to legislate not for responsible, able users but for the cowboys and we shall not stop the people like that by legislation unless the most extreme steps are taken to enforce it. I cannot see the necessary money and effort being put into enforcement to deal with the problem effectively, so I remain unconvinced by the arguments and I am unlikely to be convinced unless much stronger evidence appears.
The reference to the taking of animals through the use of gases and poisons is clearly directed at the use of cymag. Anyone who lives in the country knows how widely that powder is misused and the problems that it causes, especially for fish stocks, and I hope that serious steps will be taken to stop it getting into the wrong hands. This has been a matter of concern for many years to everyone who cares about wildlife. Yet the poacher still goes on his merry way, apparently getting away with it.
The provision about the purchase and sale of parts of animals is presumably intended to stop the purchase and sale of fox skins and I note that the fox appears in one of the schedules as an animal that may not be sold. I was not aware that the fox was in any danger of extinction in Northern Ireland. Indeed, the place sometimes seems to be overrun with them. Until recently there was a bounty on foxes and large numbers have undoubtedly been taken by various means and skinned. Yet there still seem to be quite a large number of them trotting around, causing a great deal of damage.
There is practically no fox hunting of the type practised in England. Foxes in Ireland generally are killed by trapping and shooting or gassing and they will go on being killed. All that is being done here is to remove an incentive


to hunt them down. At the end of the day, there is no danger to the number of these animals in Northern Ireland, so I see no justification for the provision.
I was astonished to learn that primroses are to be protected. If there is one plant in Northern Ireland that does not need protecting, I should have thought it was primroses. Such a provision seems to me quite ridiculous.

Mr. Chris Patten: From my experience, one group of people from whom primroses may need to be protected in Northern Ireland is visitors from Great Britain.

Mr. Ross: Let us hope that the tourist trade benefits when they come and pick them. My experience of primroses is that they are rather too early in the season for most tourists anyway. What is the policeman going to say when he meets the five-year-old child coming up the road with a bunch of primroses for his mother, a child who would be breaking the law by picking a perfectly common flower? I think that the measure is quite unnecessary.
Article 15 is a useful and interesting one. and has not up to now received the attention that it deserves. It relates to the prohibition of the introduction of new plants and animals. The Minister mentioned two of these—grey squirrels and mink. This article is excellent so far as it goes. but there is not one word anywhere in the order about the responsibility of any person or any public authority to remedy the current situation. In the light of that, I think it is just empty words. If the Government intend to say that we must not introduce things that are harmful, they should be trying to get rid of the existing harmful species instead of allowing them to run round causing the damage that has resulted in Northern Ireland over many years.
Article 20 deals with regulations to cover smooth bore shotguns and so on. Could the Minister translate that into layman's terms? Could he tell the House what shot size is represented by the figures that are referred to and what sort of rifle calibre he is referring to? Is he really saying that instead of a ·236 or 6 mm the Government will accept only a rifle of ·240 calibre and a ball for the taking of deer? That is my understanding of the provision. The people in Northern Ireland who engage in these such activities need to know the exact position in layman's terms.
Article 28 provides for a number of wide powers. In my view, the Government, in exercising those powers, would be enforcing orders which would have no parliamentary sanction whatsoever. I hope that the Minister will say whether I am correct in my assumption and, if so that he will make some effort to ensure that parliamentary procedure exists before the orders come into force.
I welcome particularly the deer protection aspect of the order. Will a game licence be needed by a person going to shoot deer in Northern Ireland? That is not clear from what has so far been said.
On hare coursing, can the Minister say how these hares are captured? I assume that they do not grow on trees but that somebody has to go out and catch them. How are they caught, where are they caught and who has the shooting rights on the land from which the hares are taken? If the source of the hares could be restricted, many of the problems mentioned might disappear. During the Assembly's investigation, a number of people remarked that hares were an endangered species, or to some extent under threat. I recall clearly that before myxomatosis hit the rabbit population, hares were unknown in the lowlands in Northern Ireland except in a rare place like Nutts Corner airport.
Whenever the rabbits had been nearly wiped out, within two or three years the hares would appear in large numbers all over Northern Ireland. They stopped being an animal of the hill and the open moor. The explanation given at the time was that the male rabbits tended to kill the leverets in the first few days of their life. It was noticeable that, as soon as the rabbit population recovered, the hares in the lowlands diminished in number and eventually vanished. If the explanation was correct, the Minister should try to find out the size of the hare population in the hills today, and what it was before the rabbit population crashed. That might give us an idea of the abundance of hares today compared with past years. I do not believe that the hare is in as much danger as some people believe.

Mr. Peter Robinson: Perhaps the hon. Gentleman could clarify his reference to the number of hares? Because the number of hares may be greater than was suggested by some members of the Assembly, would it be right to treat them in the manner in which they are treated at Clibelly?

Mr. Ross: The hon. Gentleman misunderstands me. I was not referring to anything said by any member of the Assembly Committee. I was referring to what was said by those who gave evidence to that Committee. At least two or three of them expressed that view. I would lot want anyone to believe that the Irish hare is vanishing from the face of the earth. I do not believe it is. I believe that the population of hares rises and diminishes naturally, and not always in the same place. It is noticeable to any shooting man that there has been a vast change. Hares are now found in a more restricted area than they were a few years ago, and I wonder whether that fact has been taken into account by those who fear for the future of the species.
This important order is, in the main, to be welcomed. I have mentioned two or three points that I am concerned about—two or three Government decisions that puzzle me—and I hope that it will be possible for them to be reconsidered at a later stage.

Sir John Farr: I do not know whether the order is the right vehicle for a discussion of hare coursing, but I am sure that no hon. Member would support any sport in the United Kingdom in which the quarry was not given a fair chance of escape—whether coursing, shooting, fishing or hunting. The quarry must have a fair chance of escape if a sport is to be worthy of support in a civilised society.
Part III of the order relates to deer. Why has my hon. Friend not followed the useful precedent established in England and Wales with the Deer Act 1980 and in Scotland with an order of last December? Both the Act and the order gave deer of all species much more watertight protection.
I realise that the House would not wish superfluous additions to be made to an order that is already long, but both the Deer Act and the Scottish order gave much greater protection to the deer in relation to the disposal of the carcases. A schedule was incorporated in the venison register which all dealers in venison in England and Wales, and in Scotland, have to keep. The register must be kept, the columns must be filled in and it must be available for inspection for at least three years. Two years' operation of that scheme in England and Wales has proved


of great benefit to the police and the authorities in curtailing deer poaching and in tracking down poached carcases of venison. I am surprised and disappointed that it is missing from part III of the order.
The hon. Member for Isle of Wight (Mr. Ross) and I shared the enjoyment of the Committee stage of the Wildlife and Countryside Bill. What he said about harsh weather is important. Provision should be made for it in the order. As from today, we have imposed a harsh weather ban on wildfowl, woodcock for a start. The order should enable the Minister to make a direction, when, as recently, there have been a couple of weeks of harsh weather, to ban or curtail the shooting of all forms of quarry that are under threat because of that harsh weather.
Having made those remarks, I welcome the order.

Mr. A. Cecil Walker: I am a dedicated conservationist, especially with regard to the protection of all forms of wildlife, whether indigenous or visiting during migration.
In my younger days I was interested in sport shooting. I have given it up, not because I am a bit long in the tooth to by lying in wet ditches in the middle of winter or out in the mud flats of Strangford lough waiting for the morning flight, but because I feel that, with the drastic changes that have occurred in our environment, our wildlife is under more pressure for day-to-day existence. It needs all the help that it can get. That is why I give a generous welcome to the Government's efforts, through the order, which is an honest attempt to protect our wildlife from the human species.
I am especially pleased to see that article 6(1)(c) (iv) provides that it will now be an offence to use
any shotgun of which the barrel has an internal diameter at the muzzle of more than one and three-quarter inches".
I remember such cannons being used on the shores of Belfast and Strangford loughs. They were mounted on what were known as duck punts, which were camouflaged to look like a piece of floating debris. They were manned by two people, who were usually lying down. They were always used during the hours of darkness. Moonlit nights were especially favoured because the quarry, the migratory flocks of ducks and geese, was more easily recognised then. One of the hunters quietly paddled the punt until he was among his victims and then the other one blasted off with this diabolical instrument of death and destruction. It was common to kill or maim upward of 20 to 30 birds with one shot. In the light, one could see many of them flapping about in the water, condemned to a lingering death if not retrieved and put out of their agony.
I am also pleased that article 6(1)(e) makes it an offence to use
any mechanically propelled vehicle in immediate pursuit of a wild bird for the purpose of killing or taking that bird".
The prohibition extends to animals. I have seen fast planing boats manned by trigger happy so-called sportsmen running down on all types of sea birds. The swiftest birds might get out of range, but the diving species invariably fall victim as they have not the speed to get into the air. They are therefore slaughtered on the surface as soon as they exhaust themselves. I have seen the same tactics employed in seal hunting. Although many fishermen would say that seals are a legitimate target, the cruel killing of them by such methods must be condemned.
In article 12(1)(a) there is reference to "self-locking snares". Here I might have to take issue with my hon. Friend the Member for Londonderry, East (Mr. Ross). I maintain that all snares can be self-locking; when the animal is caught, its struggles invariably cause a locking effect. If such snares killed the animals they trapped, as can happen when rabbits hit them hard, I would not be so concerned; but when the animal is caught by the neck, body or hind leg, it must suffer. The real cruelty occurs when the setter of the snares leaves them for several days before he inspects them. Many of his victims may be domestic animals. I have heard of instances where dogs, sheep and even cattle have been caught and severely injured in snares which were meant for foxes.
I would like to have seen a provision in the order for duly appointed wardens to be able to enforce the various prohibitions. In several instances culprits who were observed by wardens blatantly breaking the wildlife laws were not apprehended because the wardens did not have the necessary authority. It must be recognised in this connection that our police force cannot be everywhere at one time.

Mr. J. Enoch Powell: The Minister has already taken on board a heavy cargo, perhaps more than he can cope with conveniently in his winding-up speech, contributed to not least in an expert fashion by my hon. Friend the Member for Londonderry, East (Mr. Ross) and others. I want to make only one addition to the cargo, of which I hope he will at least acknowledge the importance, namely, the matter of identification.
Most citizens will wish to observe the law as we are making it in this order. To do so, they must be able to identify the species that are protected. With animals, and to a lesser degree birds, there is no problem. Most people are familiar with and can recognise the species of animals that are protected by the order. Even if people are less commonly able to identify all the birds that are named, at any rate the general drift of the prohibitions which the order contains is clear and could be carried in anyone's mind.
There is a different order of difficulty in relation to the flora. Schedule 8, which occupies a page and a quarter, sets out a list of plants of which even those who, without being expert botanists, take an interest in the countryside are mostly unaware. Nor are they much helped by the fact that the popular names, so-called, are occasionally inserted. I found it no assistance to identify moschatel to know that it is also called town hall clock. I have to admit to not knowing what it looks like or whether I am likely to encounter it in my wanderings in the Mourne mountains.
No doubt the Minister, who referred in his opening speech to publicising the contents of the order, has in mind some ways in which this problem can be dealt with. It would be helpful if he could give some indication to the House in his concluding speech of what those are. It is not so easy perhaps to ensure that the only effective method of identification, namely, good and coloured diagrams and illustrations, are readily visible and available.
In some of the areas with which we may be dealing in the next order to come before the House one could, with perhaps not too much risk of falling victim to vandalism, erect a series of pictures of protected flora, as we find of the duck life in St. James's park. I do not have a suggestion


to offer as to how the range of protected flora in schedule 8 can be brought to the knowledge and attention of those who might otherwise be tempted to pick a rather exciting and attractive flower and thus unwittingly break the law.
Having a wife who has a passion for picking primroses, I was at first alarmed by the speech of my hon. Friend the Member for Londonderry, East, but then reassured by my inspection of schedule 8, which informed me that so long as she did not uproot them I did not have to restrain her from breaking the law on her many excursions into the lanes of County Down.
I hope the Minister will realise that the problem to which I have drawn attention is real and practical, and I trust that he and his advisers will address their minds to it.

1 am

Mr. Chris Patten: I am grateful to hon. Members for their thoughtful speeches on this important and valuable order. The hon. Member for Middlesbrough (Mr. Bell), whom we again welcome to these debates, thought that the order might be a trifle overdue. At least we now have it. It is a good, comprehensive piece of legislation.
The hon. Gentleman said that the voluntary bodies in Northern Ireland were broadly in sympathy with the intentions of the order. I am sure that is right. I am equally sure that it is incumbent on officials in the Department of the Environment to show that we are determined to implement the order's provisions fully and vigorously.
The hon. Members for Belfast, South (Rev. Martin Smyth) and for Belfast, East (Mr. Robinson) understandably introduced a slightly more controversial note into our deliberations with a reference to park hare coursing, on which I recognise that passions run high. As I have told both hon. Members previously, the introduction of provisions on park hare coursing would have been a significant change in the policy content of the draft wildlife order and would, under existing legislative conventions, have necessitated further consultation. That would have seriously delayed progress on the order, and that would have been unacceptable in view of the Government's obligations.
Given the content of the speeches on this subject, I should point out that the objections raised by the Northern Ireland Assembly about certain specific rules and practices of park coursing were discussed with the controlling body, the Irish Coursing Club. I am sure that it was an inadvertent mistake on the part of the hon. Member for Belfast, East, but the rule to which he referred stating that points are given for hares being killed was amended several years ago. It would, therefore, be injudicious to rest an argument on that point.
I understand that the Irish Coursing Club has introduced a number of practical changes this season to bring coursing in Northern Ireland more into line with coursing as practised in Great Britain. The Government believe that voluntary action of this sort is the quickest and most fitting response to the objections to park coursing, and that, in view of this development, it would not be appropriate to introduce legislation on the subject.
As the hon. Member for Belfast, East noted, the ICC has introduced a number of changes in park hare coursing, the effect of which, as I have said, is intended to bring park coursing more into line with open coursing as practised on this side of the water.
I have looked closely at the law governing coursing. There is no substantial difference between the state of the law in Northern Ireland and the position in the rest of the United Kingdom. When I was first lobbied on this subject, I was told that what was required was not the banning of hare coursing, but the bringing of the practice of coursing in Northern Ireland as far as possible into line with the practice in Great Britain. I was also told — which I dispute — that there is a substantial difference in the legal framework in Northern Ireland compared with Great Britain. Allowing for the differences dictated by topography, the ICC sought to bring it into line.
If hon. Members want to move further and faster and ban all coursing, they should use private Members' legislation, on which they have a free vote. It is nonsense to suggest that that route is not open in connection with Northern Ireland. For example, the Video Recordings Act, introduced as a private Member's Bill, is now the law and applies to the whole of the United Kingdom.
It would not be appropriate to use the order to try to ban park coursing. Since there is no difference between the legal position in Northern Ireland and Great Britain—certainly hares in Northern Ireland are at no legal disadvantage—it would not make sense to depart from our normal procedures.

Mr. Peter Robinson: Like the hares in Northern Ireland, I am thankful that they are not at a legal disadvantage, but they are dying because of the so-called sport which the Minister believes can be rectified only by a private Member's conscience. If the ICC's regulations do not have the required effect, is the Minister prepared to bring in the necessary legislative change instead of leaving it to hon. Members to pray and hope that they might have that opportunity?

Mr. Patten: For reasons which might not always be obscure, I retain the most profound antipathy to answering hypothetical questions. I repeat that when I was first lobbied by the hon. Gentleman and others on the issue, I was told to bring Northern Ireland into line with the practice on this side of the water. It is curious but not surprising, that the argument has been changed —perhaps for understandable reasons—but my answer has to remain the same.
The hon. Member for Isle of Wight (Mr. Ross) referred to article 4(10). My hon. Friend the Member for Harborough (Sir J. Farr) has great knowledge of the subject, and we welcome his contribution. That paragraph makes it possible to protect quarry species during what would normally be the open season whenever exceptional circumstances justify it—for example, in the event of oil pollution of inclement weather, such as we are having now.
I must tell the hon. Member for Isle of Wight that we can encourage a voluntary ban on wildfowling even before the legislation comes into force, as we did successfully in 1981. We were grateful to the parties to that agreement.
I can tell the hon. Member for Londonderry, East (Mr. Ross) that a ban can be applied to small areas of the Province as well as to the entire Province. That takes account of his practical and accurate observation about weather conditions in the Province.
The hon. Member for Isle of Wight referred to the curlew. He and other's, including my hon. Friend the Member for Harborough, will recall that the curlew


achieved complete protection as the result of an eleventh hour change to the Wildlife and Countryside Act by means of a Lords amendment. The species is more widespread and abundant in winter in Northern Ireland than it is in Britain. There is a tradition of shooting curlew—mainly inland birds, of which there are a large number in Northern Ireland—for food. However, there is no evidence that the species is suffering as a result of shooting, no doubt because the shooting of waders generally is infrequently practised by wildfowlers. The list of birds that may be shot during an open season has been substantially reduced. In the absence of compelling reasons, the curlew's status as a quarry species remains unchanged. That is obviously a position that we shall need to keep under review.
The hon. Member for Londonderry, East spoke quite properly of the importance of teaching children about conservation and wildlife. I wholly accept that. It is our intention to take a much more active role educationally, and we shall be distributing to all schools literature on this order and on the one that we shall be discussing shortly.
The hon. Gentleman asked about automatic shotguns. He was right in thinking that the ban on birds results from the EEC directive. He will probably know that automatic shotguns can still be used for controlling pests and that the ban applies only to those birds and animals listed in schedule 6. The hon. Gentleman explained the practical experience of a shooting man and asked whether there was any evidence of birds being shot after liberation. I can say that there is no such evidence of that happening in Northern Ireland. It is spreading in Europe and we do not wish to see it happening in Northern Ireland.
The hon. Gentleman asked about self-locking snares. I would have had a great deal more sympathy with his argument had he been talking about free-running snares. I share the view expressed by the hon. Member for Belfast, North (Mr. Walker), that self-locking snares are banned under the EEC wild birds directive.

Mr. William Ross: Can the hon. Gentleman tell me how many times he has actually set a snare?

Mr. Patten: I assume that the hon. Gentleman was being literal rather than figurative. I have not made it a practice to set snares. I appreciate that sometimes one is called upon to speak at the Dispatch Box on subjects of which one does not always have such an intimate

knowledge as some hon. Members. This is clearly one such occasion in regard to snares, about which the hon. Gentleman knows more than I do. I can only say that I received a number of representations about that subject. It may be that views differ, but the overwhelming view agreed with the hon. Member for Belfast, North.
The hon. Member for Londonderry, East asked about article 15. I was interested to hear what he had to say. With the best will in the world, it is not possible for the Government to eradicate the existing species because of their widespread distribution. We are talking not only about animals, but, as anyone who knows and loves Strangford lough will know, about Spartina. The order is designed to prevent the spread of the undesirable species. I hope that we can do that.
My hon. Friend the Member for Harborough spoke from his great love and knowledge of deer. Venison in Northern Ireland can be sold only to a licensed game dealer. I shall write to my hon. Friend giving details of the licensing conditions applicable to game dealers.
The hon. Member for Belfast, North made a powerful argument for conservation. He thought that the wardens, among others, should be given more extensive powers. I am bound to say that I have great personal reluctance towards extending police powers to those outside the constabulary. That is why I resisted arguments from a number of sources to do that in this order.
The right hon. Member for South Down (Mr. Powell) spoke of the importance of being able to identify those species which are referred to in schedule 8. That is a substantial point, of which we shall have to consider how best to take account in our publicity and explanatory booklet that we shall be issuing about the order. I hope that we shall be able to satisfy him that we have done all that we reasonably can to identify the species, some of which, I fancy, are not familiar to either of us.
The right hon. Gentleman spoke of the primrose. He is right to say that the danger is the uprooting or tearing out of primroses which sometimes happens when people want to enhance the quality of their gardens, but at the expense of the countryside. That is why we have included the primrose in the schedule. On that Primrose League point, I commend the order to the House.

Question put and agreed to.

Resolved,
That the draft Wildlife (Northern Ireland) Order 1984, which was laid before this House on 22nd November, be approved.

Nature Conservation (Northern Ireland)

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Chris Patten): I beg to move,
That the draft Nature Conservation and Amenity Lands (Northern Ireland) Order 1984, which was laid before this House on 22nd November, be approved.
In November 1983, the proposal for a draft Nature Conservation and Amenity Lands (Northern Ireland) Order was published for consultation. Comments were received up to 3 February 1984 and the proposal was considered by the Northern Ireland Assembly, which forwarded its report to the Secretary of State on 28 March last year. The Assembly welcomed the legislation and put forward 20 recommendations for amendment, together with 13 further recommendations seeking assurances largely relating to the implementation of certain aspects of the legislation. Eleven of the suggested amendments are included in the draft order and a number of the other recommendations are covered in substance by the provisions of the order as at present drafted.
I shall refer in due course to the more substantive changes resulting both from the consultation process and from consideration by the Northern Ireland Assembly, but I wish first to thank the hon. Member for Belfast, East (Mr. Robinson) for the contribution that he made to the order.
The Amenity Lands Act (Northern Ireland) 1965, which this order will supersede, is at present the cornerstone of legislation on nature conservation and countryside amenity in Northern Ireland. It was the first piece of legislation of its kind when enacted 20 years ago. In that time notable progress has been made with a planned programme of establishing nature reserves, areas of scientific interest and amenity areas. Several areas of outstanding natural beauty have also been designated.
However, the increasing pressures on the countryside from competing forms of land use and experience arising from the Act's operation over almost two decades have shown the limitations in its framework; amendments are now clearly necessary. These are incorporated in the measure, along with a necessary and perhaps overdue consolidation of the 1965 Act.
The order will bring Northern Ireland broadly into line with the rest of the United Kingdom in matters of countryside, recreation and amenity. It is not possible to do so precisely, because planning control is exercised differently in Northern Ireland. In addition, the executive responsibility in Great Britain for nature conservation and countryside recreation lies with two semi-autonomous bodies, the Nature Conservancy Council and the Countryside Commission. In Northern Ireland that function rests with the Department of the Environment.
However, the new provisions in the draft order draw heavily on Great Britain sources, specifically the Nature Conservancy Council Act 1973, the Countryside Act 1968, the National Parks and Access to the Countryside Act 1949 and the Wildlife and Countryside Act 1981.
It is appropriate at this stage to mention that the publication of the proposal for a draft order prompted a debate on the question whether the existing administrative structure for conservation in Northern Ireland is the most appropriate or whether it could be improved by the

establishment of a body, or bodies, on the lines of the Nature Conservancy Council and the Countryside Commission. As a result of the interest in this matter, the Department of the Environment of Northern Ireland is currently reviewing the existing structure. It has been assisted by a distinguished and independent expert in this sphere, Dr. Jean Balfour, whose report was published just before Christmas.
The Northern Ireland Assembly, among others, feels that there is considerable merit in the concept of a separate body for conservation in the Province. However, recognising the need for full public consultation following the review, and the desirability of bringing into effect at an early date the many improvements which the proposed order and the related wildlife order would introduce, the Assembly supported the order subject to the recommendations contained in its report. Any necessary alterations to the structure for conservation in Northern Ire Land will therefore be the subject of a further Order in Council in due course. I am sure that we were right to proceed rapidly with this legislation and to consider the matter of structure at a more deliberate pace.
The existing functions of the Department in relation to nature conservation and countryside amenity are narrow. They are limited to the acquisition of lands for nature reserve and amenity purposes and the designation of national parks, areas of scientific interest and areas of outstanding natural beauty. These powers are restated in the order, but article 3 will enable the Department in future to exercise a wider range of nature conservation and countryside functions, similar to those administered by the Nature Conservancy Council and the Countryside Commission.
Article 4 recognises the land use demands of public bodies and requires that such groups, which include Government Departments, district councils and other statutory bodies, should take into account the requirements of nature conservation and countryside amenity in the exercise of their land-related functions. This has a direct analogue in section 11 of the Countryside Act 1968 and reflects an acceptance that the demands of nature conservation and countryside amenity should have the same consideration as other forms of land use planning.
Article 5 establishes a new conservation committee, the committee for nature conservation. It will assume the responsibilities of the existing nature reserve and wild birds advisory committees and will have certain additional functions under this order and also in relation to wildlife protection.
Parts III and IV are mainly consolidation and restate the Department's existing role in relation to amenity lands, national parks and areas of outstanding natural beauty. Consultation requirements in relation to the latter have, however, been considerably widened and fresh powers have been given to the Department to enable it to take more positive action towards the conservation of such areas.
In Part V, article 20 introduces the totally new concept of marine nature reserves and in that respect corresponds to section 36 of the Wildlife and Countryside Act 1981.
The case for establishing statutorily protected marine nature reserves was made at considerable length in the 1979 joint Nature Conservancy Council — Natural Environment Research Council publication, entitled "Nature Conservation in the Marine Environment'. It made the point that some of the primary objectives of


conservation policy on land have been to conserve representative examples of plant and animal communities, to safeguard sites where research and experiment can be pursued without disturbance and to provide education facilities. It is illogical that such an approach should end at the low water mark, especially in view of the interdependence of marine and land-based life. Procedural instructions to designate marine nature reserves are precise and all power to create a reserve and to confirm byelaws regarding it will be vested in the Secretary of State for Northern Ireland.
For the first time, district councils are to be given the power to establish nature reserves within their areas and to acquire land for that purpose. It has long been a feature of Great Britain law that local authorities have this power and I look forward to district councils in the Province playing their part in conservation matters.
Part VI deals with areas of special scientific interest and its provisions represent the most substantive change in the proposal for a draft order since it was published for consultation. At that time it was recognised that considerable modification of the Great Britain procedure, found in sections 28 and 29, for example, of the Wildlife and Countryside Act 1981, would be required in order to apply it to the Northern Ireland circumstances, in which, for example, the existence of a single-tier structure with the Northern Ireland Department of the Environment responsible throughout, required a single continuous procedure. It was clear that this was a matter that should be fully debated at the consultation stage. Hence, the proposal merely included a provision equivalent to section 28 of the 1981 Act with the Department at the same time encouraging full discussion of the matter through the circulation of a separate consultation paper to the main interests concerned and to the Northern Ireland Assembly. The provisions now included in the draft order are the result of that consultation. The procedure to be introduced will effectively protect areas of special scientific interest in Northern Ireland and at the same time enable the United Kingdom to comply with the requirements of the Berne convention. Parargraph (1) of article 25 eliminates the "three-month loophole" which has caused so much concern on this side of the water.

Rev. Martin Smyth: The hon. Gentleman by-passed article 24. What do people believe to be the significant change? When article 14 was debated in the Assembly, the people's response was that it was better for the power to be discretionary than to be mandatory. A change in article 24 which shows that the power is discretionary rather than mandatory has caused concern. That was not on the list of changes noted in the response.

Mr. Patten: I am delighted to deal with that point, because I know that concern has been expressed in some quarters about article 24 as drafted. When redrafting this provision, it was felt that an enabling power similiar to that used for the creation of national parks, areas of outstanding natural beauty, marine nature reserves, and so on would be appropriate, achieving consistency of drafting within the context of the draft order. That decision was taken in the knowledge that the existing permissive powers in the draft order to which I have referred had not been challenged during the consultation process.
Our legislation runs together. The procedures in sections 28 and 29 of the equivalent legislation for Great Britain are mandatory in one section and ultimately permissive in section 29 which refers to the powers of the Secretary of State. The procedures give us a more streamlined and coherent mechanism. Nevertheless, I appreciate the concern expressed, so I shall give hon. Members a firm and unequivocal assurance that my Department will exercise its powers over areas of special scientific interest in a manner consistent with the objectives of these provisions. Scientific criteria for the selection of ASSIs are being prepared corresponding closely to those applied in Great Britain. I shall consider it an unshakeable obligation on my Department to declare as areas of special scientific interest all areas that meet those criteria.
We shall need to legislate again shortly if we are to implement, after a suitable period of consultation, the main recommendations in Dr. Balfour's report. If, at that stage, there are any reservations about the way in which we are implementing article 24, we shall be prepared—this is another firm commitment—to amend this order and to introduce a mandatory provision.
The financial provisions of article 29 widen the Department's existing powers to grant-aid voluntary bodies, which are presently limited to those under the Wild Birds Protection Acts (Northern Ireland) 1931 to 1968, to include any body which has among its objects the conservation of wildlife or of the countryside. This is entirely consistent with the position in Great Britain.
I am confident that the order will provide for the more effective administration of nature conservation and countryside amenity matters for many years ahead, although I accept that we may need shortly to introduce, as I have said already, further complementary legislation when we have all had a chance to form a view on the main recommendations of the Balfour report— sensible as I believe their broad thrust to be. I commend the order to the House.

Mr. Stuart Bell: I am grateful again for the manner in which the Minister has taken us through the draft order.
There are two important aspects of the order. One is that it seeks to bring into line, as the Minister said, the nature conservation legislation in Northern Ireland with that in Great Britain. As he pointed out, it goes somewhat further, because it rectifies some of the weaknesses and loopholes that have become apparent in the Wildlife and Countryside Act 1981, and, not for the first time, we see legislation pertaining to Northern Ireland somewhat ahead of its counterpart on the mainland.
The other important aspect is that we meet our international obligations. We meet the obligations placed upon us by the European Community directive on conservation and wildlife and also, as the Minister said, the Berne convention.
The Minister was kind enough to take us through the consultation procedures which went on for about a year. There were therefore extensive consultations. The Northern Ireland Assembly Environment Committee subjected the order to detailed scrutiny. Amendments were made and, in general, the order was welcomed by those who have nature conservation at heart.
Notwithstanding that extensive consultation, one word in the text has been changed and the Minister met head on the point and the problem that that change might have brought about. He referred to consistency of draftsmanship. The word "may" has been placed in article 24, rather than the word "shall". Thus, powers which might have been mandatory have become discretionary. Discretion is always the better part of valour; free will is better than coercion; and thou mayest is better than thou shalt. It was the entire philosophy behind the play by Henrik Ibsen and a novel by John Steinbeck. The play by Ibsen was called "The Lady from the Sea" and the novel by Steinbeck was called "East of Eden". However, in relation to nature conservation and amenity, the change may be regrettable.
As the House is aware, article 24 deals with areas of special scientific interest. On the mainland, as the Minister said, the Nature Conservancy Council has a duty to notify sites which are of special scientific interest. Article 24 declares:
Where the Department, after consultation with the Committee for Nature Conservation, is satisfied that an area of land is of special scientific interest, by reason of its flora, fauna or geological, physiographical or other features, and accordingly needs to be specially protected, the Department may make a declaration that the area is an area of special scientific interest.
The change in the wording from "shall" to "may" raises a number of issues on which we require elucidation.
Why was the change made after the consultation procedures had been completed? Why were interested parties not informed that the change had been made, but left to discover it only when they read the draft order published and delivered to the Palace of Westminster? Has the change in any way altered the obligation placed upon Her Majesty's Government by the European Community directive? Is the order still in line with the Wildlife and Countryside Act 1981? If it is not, is it proposed to alter the Act to bring it into line with the order?
The Minister has explained why the amendment went into the text unannounced, but has it been before a Standing Committee on Statutory Instruments? If the change was brought to the attention of the Committee, what, if any, were the comments of members of the Committee?
There can be little argument that when the order was originally published—and, indeed, even in accordance with the Amenity Lands Act 1965 for Northern Ireland—the Department of the Environment had a statutory duty to notify land as an area of scientific interest where that land, in its opinion, was required to be protected because of the wealth and richness of both flora and fauna. Now that that duty has become discretionary rather than mandatory, it gives the impression that there is a weakening of the sense of responsibility towards nature conservation in Northern Ireland. Having been brought in without consultation, it creates what the Royal Society for the Protection of Birds describes as
a very dangerous precedent
and one which
undermines the good which has been done to improve the orders during the consultation.
I believe that the Minister's statement will go some way towards modifying that attitude, but, nevertheless, the point should be made.
The reasoning behind the change in the wording is further called into question when Ministers have argued in the past that the notification of land of special scientific interest is simply declaratory of its scientific value, rather

than a decision as to its future management, but such designation is also of benefit to the landowner or farmer, for without that designation no information at all is forthcoming on the reasons for the site's value, and no advice can be given on future management. Indeed, no compensation would be available if permission were refused for further changes of land use in such an area.
Notification of some sites and failure to notify others of similar importance—an inevitable outcome of a may or may not policy—will cause confusion and increase rather than reduce concern over those valuable sites. In addition there are appropriate safeguards for the interests of those landowners and occupiers, including compensation where necessary, and those come into play at a later stage if and when there is a development proposal on the table to be considered.
Before leaving the subject I can do no better than quote from the Royal Society for the Protection of Birds, which declared:
We are at a loss to understand why the wording of article 24(1) has now been changed, and are moreover deeply disturbed by the perplexingly unorthodox way in which the change was introduced — tardily; unannounced; contrary to the expectations of the Northern Ireland Assembly; without consultation with any of the interested parties.
It is hardly surprising, in those circumstances, that the Royal Society for the Protection of Birds pressed for the withdrawal of the order and its resubmission in the form which originally contained the word "shall" rather than the word "may" in article 24(1).
As I mentioned earlier, in some ways the order is ahead of the Wildlife and Countryside Act 1981, for that Act contains a recognised loophole. It became known as the three-month loophole; that is to say, during a three-month consultation period any owner of land subject to such a notification under the Wildlife and Countryside Act 1981 might modify the land if he so wished. That would or might be to the detriment of conservation. In addition, he might do so without sanction. That preoccupied those Ministers responsible for the operation of the Act, and they are prepared to modify it when parliamentary time allows. Indeed, it may be that they will take advantage of the excellent private Member's Bill which my hon. Friend the Member for South Shields (Dr. Clark) proposes to introduce to reform the 1981 Act.
The order is ahead of that Act because of the inclusion of articles 25 and 27. Article 25 prevents the owner or occupier of any land from tampering with it once there has been a declaration, and for so long as that declaration remains in force he cannot carry out, cause or permit to be carried out, on his land any operation or activity without written consent. My hon. Friend the Member for Wentworth (Mr. Hardy) introduced a private Member's Bill to modify the Wildlife and Countryside Act 1981 along the lines now defined by article 25 of the order. His Bill has now been superseded by that of my hon. Friend the Member for South Shields.
Should the Government take on board all the elements of the private Member's Bill of my hon. Friend the Member for South Shields, thus tightening, for example, the laws to prevent badger digging, empowering the Ministry of Agriculture, Fisheries and Food and the Forestry Commission to give Government grants for conservation practices—

Mr. J. Enoch Powell: What about Northern Ireland?

Mr. Bell: If the right hon. Gentleman is patient, I shall come to the matter to which he refers.
I was saying that should the Government tighten laws, empowering the Ministry and the Forestry Commission to give Government grants for conservation practices and making it easier for the Nature Conservancy Council to declare marine nature reserves, will those changes in the Wildlife and Countryside Act be followed by another order for Northern Ireland?
I should like to draw the attention of the House to article 20. Under the Wildlife and Countryside Act, it was thought desirable that there should be created marine nature reserves. The Minister referred to that in his explanation of the order and said that powers would be vested in the Secretary of State. Yet, because of the system of consultation on this side of the water, no marine nature reserves have been created. Are the provisions in article 20 the same as under the Wildlife and Countryside Act, and, if so, how many marine nature reserves does the Minister expect to be created in Northern Ireland as a result of the legislation?
Over and above the criticism which the Minister has taken on board and sought to assuage, a great deal in the order is welcome. We have seen that the habitat provisions of the order provide the long-awaited strengthening of conservation legislation in Northern Ireland. We are complying with our international obligations. We are witnessing, therefore, a significant stage in the development of conservation in Northern Ireland, and it should be further said that the order constitutes an efficient and practical framework for, to quote the RSPB again,
wise land-use planning and the conservation of natural resources".
However, two questions remain to be answered. Will this order and the Wildlife (Northern Ireland) Order be implemented? The Minister gave an assurance that the latter order would be. Secondly, will the resources be made available so that the orders can be fully implemented? There is an ungenerous suggestion abroad that the reason for the significant word change in article 24 from "shall" to "may" was based on resource considerations; that it would cost less to have a discretionary rather than a mandatory power placed with the Department of the Environment.
I am sure that the Minister would wish to take an early opportunity to refute such a suggestion. Nevertheless, it lingers on in the minds of those who have been involved in the consultative procedures. Any categorical assurances that he can give would be most welcome. They would be even more welcome if the Minister were to confirm that the resources overall will be available to implement the orders. These resources should mean greater staff and greater finance so that the conservation effort in Northern Ireland can be strengthened, rather than simply maintained. A desirable goal would be one where these resources were on a par with those available on the mainland.
We therefore join the Minister in commending the order to the House. We note the statement that he made in relation to the mandatory exercise of the power under section 25. He has offered to change the wording of that article in a future Order in Council if that is the appropriate course of action for him to take. We welcome that suggestion and, as he has done, commend the order to the House.

Mr. Peter Robinson: I am placed in the same embarrassing situation in which I was placed on the last order: while I naturally welcome the vast majority of recommendations contained in the order, I have one gripe. That flows, perhaps regrettably, from the procedures that are applicable to Northern Ireland business. The Minister will be aware, although the House may not, that while in the case of the last order I concentrated on dealing with what the Minister did not do, he did in fact accept 55 of recommendations of the Assembly.
In the case of this order, of the 33 recommendations of the Assembly, the Minister accepted 29. I leave to one side, perhaps ungenerously, those recommendations which he did accept and shall consider the areas in which we still have some difference of opinion. Nevertheless, I place on record the grateful acknowledgement of most people in the Assembly and in the Province of the contents of the order, which embraces two main themes, the first dealing with the structure of conservation in Northern Ireland and the second dealing with the protection of areas of environmental importance.
On the structure of conservation in Northern Ireland, I take some heart from a comment that the Minister made concerning the report of Dr. Jean Balfour. I have had the opportunity to read that report. I was relieved at the end of doing so because I am holding the ring, as it were, between colleagues in the Assembly and have to part my party leader from certain other colleagues; in other words, considerations of agriculture have been weighed against those of the environment. That Dr. Jean Balfour has steered what I consider to be a fair and balanced middle course helps me out of many difficulties that I might have experienced when the report is debated in the Northern Ireland Assembly.
I trust that, when I put this forward as a personal view, the Minister will accept every letter of it rather than putting it into the melting pot and considering afresh what emerges at the end of the process. I take encouragement from the fact that in relation to article 24 the Minister said that, if there were any reservations when he came to legislate for the structure of conservation, he would take that into consideration. This clearly shows that in his office he is already contemplating legislation for the structure of conservation. I for one would be eager to hear from the Minister at what stage that may be expected. More important, following the comments from the Opposition, does he believe that the resources for that structure can be found within his budget? I appreciate that there is pressure from priority areas such as housing and all too often conservation becomes a scapegoat and is left out when finances are allocated. I hope that the Minister will be able to say that it will be possible to meet the Balfour report in terms of finance.
In my discussions in the Assembly I discovered that the chasm that I had imagined between agricultural and environmental interests did not exist, that there was a great deal of common ground between them and that the two terms were not necessarily mutually exclusive. Indeed, many strong conservationists are members of the agricultural community and some of the best protectors of the natural habitat in the Province are farmers. I was pleased to find that the Ulster Farmers Union, the


Agriculture Committee of the Assembly and even the Department of Agriculture in many ways were not unsympathetic to proposals to protect the environment.
The problem, however, is the unfortunate change of one word in the order. Again, this shows the weakness of our parliamentary procedures. Even when the Minister agrees that the word should not be as it is and the House would clearly be prepared to accept the change to which he has referred, he cannot do anything about it because Orders in Council cannot be amended, however sensible the amendment may be.
For once, the situation cannot be blamed on the Assembly, however much any hon. Member may wish to do so. The proposal for a draft order considered by the Assembly was perfectly satisfactory as it used the mandatory "will" or "shall" rather than the permissive "may". The Assembly made no recommendation because it was satisfied with the proposal, having had the advantage of both written and oral evidence from the Minister's Department which at no time referred to any proposed change in the wording.
None of the conservation and amenity groups made any comment on the matter because they, too, were perfectly satisfied. Indeed, we were aware that the 1 965 Act was mandatory. as was the 1981 Act for Great Britain, so it was logical that the Northern Ireland order should take that form as its main purpose was to bring Northern Ireland into line with Great Britain. Suddenly, however, somebody somewhere in the Department brought out a rubber and a pencil and changed a proposal that had left everyone quite pleased into one that has alarmed the vast majority, if not all, of the conservation and amenity groups and bewildered many of the rest of us.
I recognise that the Minister in good faith has given an undertaking to the House. That is on the record and I know that he will stand by it. No matter how many of us may wish it, the Minister will not be with us always. He is undoubtedly destined for higher things. He may not be there to ensure that the guarantee that he has given to the House, and which the House no doubt accepts, will be upheld in the same spirit by his successors. The hon. Gentleman might—heaven forbid—even be succeeded by an hon. Member of another party, who might not take the same generous view of the interpretation of the legislation.
I hope that the Minister will tell us tonight that, regardless of whether there are major reservations, he will, when he finds that he can legislate for the Balfour report on the structure of conservation, correct this unfortunate mistake in the legislation and ensure that those who follow him have the strength of statute behind them when they take decisions.
I do not believe that the Minister was trying, by sleight of hand, to put one over on the Assembly, the conservation groups or the amenity organisations in the Province. Here is a way in which he can prove to us that I am right.

Mr. J. Enoch Powell: I join the hon. Member for Belfast, East (Mr. Robinson) in looking forward to the day, which is visibly coming closer, when the law in Northern Ireland will be made in a manner which enables it to be debated and amended in detail as is the law for the rest of the United Kingdom. Indeed, it was part of the encouragement of this evening's proceedings to have learnt that the Liberal party is now in

favour of legislating for Northern Ireland, wherever practicable, within a United Kingdom Bill. Things are looking up, and we may not have to take part in niggling debates such as this for ever.
When there is a good row going on over a word—the argument between "may" and "shall"—the temptation to join in is irresistible. When I heard reference to the Royal Society for the Protection of Birds, it occurred to me that there was a case for a royal society for the protection of parliamentary draftsmen. They are, as Dr. Johnson once defined a lexicographer, "harmless, necessary drudges" and it is only right that from time to time a word should be said in their favour. This evening, that is a task that it falls to me to take up.
I have read article 24(1) of the draft order without any inhibition caused by having previously considered a different draft, and I notice that the conditional part of that paragraph is voluntary. It is discretionary. For "Department" we have to read "Minister", doing the usual voodoo—that is now the in word—which is prescribed by the Northern Ireland Act 1974. The paragraph begins:
Where the Department is satisfied that
such and such. We then proceed to the main sentence, of which the verb is now "may".
It seems to be self-evident that if a condition is discretionary, the act itself must be discretionary by nature and that, if the draftsman had originally written "may" he would have been acting in conformity both with good sense and with the drafting practice that, in other statutes, we have been accustomed to who in our younger days happily moved amendments to leave out "may" and insert "shall" and made such speeches as have been heard in the Chamber tonight.
I do not believe that there is anything wrong with paragraph (1) of article 24. What is wrong—this has come out in the debate — is the awkward manner in which the drafting was brought into consonance with logic and common practice at an awkward stage in the gestation of the order. This too is something which we would have avoided if we were legislating in the normal manner, for if we were legislating in the normal manner it would have fallen to the Minister in charge of the Bill first to decide whether he wanted to alter the drafting at any particular stage and then to come forward to Committee and move his amendment in the open. All of the speeches would then be recorded in the indelible pages of Hansard and there would be no suggestion of disappointment and no tremors of alarm would have run through the observing public as they have done as a result of this drafting alteration.
I hope that the Minister will take comfort from those remarks and also from the generous and comprehensive démenti of any other intention but that always expressed in relation to this article which he offered to the House.
I should like to raise with the Minister the relationship in this order between the functions of the Minister, or Department, and the functions of local authorities. Far be it from any hon. Member on this Bench to query powers entrusted to local government in Northern Ireland, but even when we see such powers entrusted, as they are in two places in this order in respect of nature reserves and areas of outstanding natural beauty, it is pertinent to inquire what is to be the division of responsibility and how that is to work out between the Minister and district councils. If the Minister is to make up his mind as to the nature reserves that need to be created, what scope is there to be for the district councils similarly to arrive at their


own conclusions to create nature reserves? Are we to have competitive creation of nature reserves between local authority and Department; or is there some gradation of the desirability of nature reserves whereby the higher level of necessity will be met by ministerial decision and the lower level will be left to the discretion of the local authority? It seems to me that, with this order, we are entitled to some indication from the Government of the manner in which they believe these concurrent powers will be exercised by central and by local government.
The concurrence in the matter of nature reserves is on the face of the order. In the case of areas of outstanding natural beauty, the concurrence is between the powers in this order and some of the powers in the Access to the Countryside (Northern Ireland) Order 1983.
I draw the Minister's attention, and that of the House, especially to the provisions in paragraph (5) of article 14, which empowers the Minister to formulate proposals for, among other things, promoting the enjoyment of areas of natural beauty by the public and
providing or maintaining public access to it.
That latter provision is directly concurrent with the powers of local authorities under the access to the countryside order. It would be helpful if there were a certain statement of policy in that respect from the Government, especially as—in this I find myself in agreement with the hon. Member for Middlesbrough (Mr. Bell) — the financial provisions in this order appear to be extraordinarily vague. Indeed, they are difficult to understand.
When one considers the financing of the provisions to which I have drawn attention, one learns in article 29 that the Department may
make grants to any body of persons
and
give financial assistance by way of grant or loan".
There seems to be a strange inapplicability of the wording of that provision to the direct operations of the Department itself. It looks as if it were a provision of finance purely for the assistance of secondary bodies or secondary functions under the order. I hope that when he is replying to the hon. Member for Middlesbrough the Minister will be able to clear that up. I do not think it would be reasonable to expect him to offer in numerical terms any forecast or specification of the cost of implementing the order in successive financial years, but I think the House ought to understand better than it is easy to do from article 29 how the application of the financial provisions will work.
I return to the concurrence of powers for providing access to the countryside so as to utter a cautionary note which may have financial applications. About a year ago the Minister and I were in correspondence, helpful as correspondence with the hon. Gentleman always is, if I may say so, on access to the countryside in one of the areas of the most wild and glorious natural beauty in the most beautiful constituency in the United Kingdom, namely, South Down. I have in mind the Trassey valley in the Mourne mountains where public access exists, always has existed and should be properly preserved and safeguarded, if that were necessary.
Unfortunately, the result of unregulated public access is to bring considerable loss and damage to those who earn their livelihood or part of their livelihood from that countryside who happen to be members of one of those

syndicates which for historical reasons control the use of the uplands in that part of the Province. They find that the unregulated access along undoubted rights of way to the joys of the countryside in that area results in damage and loss to themselves, simply because those who have access do not restrict themselves to the right of way nor their activities to enjoying the country but go as far field as to collect firewood by demolishing fences and making fires for cooking and other purposes with the result of their ravages.
The correspondence between the Minister and myself terminated somewhat unsatisfactorily in February of last year with a reference to the fact that the district council could make an order, the terms of which could be agreed with the users of the land concerned. That left completely at large who was to do the policing of this access to the countryside and where the financial burden would be borne of any loss which rested with the users of the land as a result of the access that was accorded.
So we are brought back, not surprisingly, to finance in the end. One would wish to know how far the Department will stand behind the district councils in whatever is to be their distinct function, as opposed to the Department's own function in exercising the duties which can be undertaken under the order. I know that this is a problem to which the Minister has been alive. I place it upon the record deliberately because, though I agree with the hon. Member for Belfast, East that good agriculture is one of the best forms of conservation and enhancement of the amenity of the countryside, we must remember that there is always an attendant potential penalty which accompanies all these well-intended and desirable measures. That penalty is often not spread over the whole community but falls on individuals and specific groups to whom it is also our nature to have regard.
As well as giving sympathetic attention to these matters in his administration of the order, I hope that the Minister will also be able to make an illuminating reference to them when he replies.

Sir John Farr: One of the most welcome features of the Wildlife and Countryside Act 1981 was the firm requirement relating to SSSIs. This order contains a similar form of site of special scientific interest known as an area of special scientific interest.
I wish briefly to back up what has been said about article 24. The Royal Society for Nature Conservation, the national association of the nature conservation trusts, is concerned about the change in the wording to "may". It regards the change to be of such fundamental importance that it would like to see the order withdrawn and a new one introduced.
Unlike the House, it has not had the benefit of the Minister's explanation and his firm and generous undertaking that he will look at how this works. He also said that in any event he would be introducing new orders and legislation in relation to wildlife and countryside matters in Northern Ireland and that, if any concern still existed at that time, he would put the matter right.
However, it should be put on record that the Royal Society for Nature Conservation feels that, as the order is currently drafted, criteria other than scientific ones could easily creep into the decision about whether or not an area was scheduled. For example, it would be easy for a site


with potential for industrial development not to be scheduled, thereby losing any benefit it might have received from an official label as to its importance.
These are the fears of the national association of the nature conservation trusts, a not unimportant body, which has been closely concerned with the hammering out of the structure of the order. While I know that it, like me, willingly accepts the undertaking that the Minister has already given, I hope he will recognise that this concern is widespread on both sides of the House.

Mr. Stephen Ross: I do not wish to labour the point about article 24, which has been referred to by every hon. Member who has spoken so far. However, this first-class order has a shadow hanging over it because of the change in the wording from "shall" to "may". Most people think that it should be "shall", as that more clearly reflects what was intended.
The Minister went a long way to assure us, but his words will be read over and over again, not only by the Royal Society for the Protection of Birds, but by the Royal Society for Nature Conservation and many others who are concerned about any weakening of the order. I hope that the Minister will give us further assurances when he replies.
One of the failings of the Wildlife and Countryside Act is the lack of adequate resources provided to the Nature Conservancy Council and to a number of qualified people on the ground. That has now been met by an additional £7 million being made available to the NCC. That will allow it to take on at least another 100 staff.
The Royal Society for the Protection of Birds reckons that in the Countryside Commission, the NCC and the national parks about 2,000 people are deployed on conservation matters in Great Britain. However, it calculates that only 27 such people are deployed in Northern Ireland in the Department of the Environment, and they are spread about and have different obligations. The right hon. Member for South Down (Mr. Powell) wondered where the money would come from to increase the numbers. More people will be needed if the measure is to be properly implemented.
Will it be possible to extend the work of the NCC to Northern Ireland? I hope that that will not be thrown against me as another Liberal suggestion. I do not see why the NCC should apply only to Great Britain. I do not want to reflect on the abilities of the members of the proposed committee on nature conservation, or on the Ulster Countryside Commission, but they will act merely in an advisory capacity and not operate on the ground carrying out orders.
Has the Balfour report been published, and will people other than hon. Members be able to make representations about it? Will there be adequate consultation? I assume that interested parties will be able to make representations to Ministers. I hope that discussions will be fruitful and that the error in article 24 will be remedied. I welcome the step forward. Northern Ireland is now ahead of the rest of the United Kingdom, and that is a jolly good thing.

Mr. A. Cecil Walker: I have studied the order, and I commend the Government on their efforts in support of the principles of conservation and provisions for Northern Ireland.
Some aspects of the order concern me. As that concern might be due to my ignorance, I should be pleased if the Minister could clarify one or two matters.
I am interested in marine nature reserves, so I was happy to read in article 21 (2) (a) (ii) on page 16 that provision may be made
for prohibiting or restricting…the doing of anything therein which will interfere with the sea bed or damage or disturb any object in the reserve.
I agree with those sentiments, but I should like clarification of article 21 (5) on page 17. That states:
Nothing in the byelaws so made shall make unlawful…anything done more than 30 metres below the sea bed.
I should have thought that anything done below the sea bed would interfere with any marine reserve.
Perhaps it refers to the safety of a vessel. It is not unlawful to discharge any substance from a vessel. Paragraph (4) (a) says that it is not intended to
prohibit or restrict the exercise of any right of passage by vessel other than a pleasure boat".
I do not know what difference there can be between a pleasure boat and a commercial boat. They are boats and they can cause problems in a marine reserve. They can erode banks and disturb the inmates. That seems to be recognised in article 30 (3) (b), which says that the Department
may prohibit or restrict, either generally or in a manner specified in the bylaws, the use of mechanically-propelled vessels on watercourses in, or whose shores lie within, any such land".
The order states that a watercourse
includes tidal and coastal waters, rivers, canals, lakes and reservoirs.
I am pleased that arrangements can be made to provide grants to any body of persons involved in conservation, as that will encourage active participation in the protection of our habitat. It will be welcomed by all those interested in that part of our environment.

Mr. William Ross: I had intended to follow the hon. Member for Belfast, East (Mr. Robinson) and berate the Minister about the change from "shall" to "may". They are always good words on which to base a few remarks. However, my right hon. Friend the Member for South Down (Mr. Powell) has already given an explanation that I have not yet fully digested. I have no doubt that the Minister, who has greater back-up than I, will have sorted it out and will have his own views. Having said that, the information that we have been given is that nature conservancy in Great Britain has a statutory duty to declare an ASSI.
I do not yet understand whether there is a difference between the end result in Great Britain and Northern Ireland. I welcome assurances, but Ministers and Governments change. However, a statutory right would remain unless it was brought before the House and changed. For that reason, I am unhappy and want to hear rather more about it.
I wish to ask one or two questions about finance. Under article 7, the Department may make grants either by way of the Department of the Environment or otherwise to the National Trust for the acquiring of land. Under article 29, the Department of Finance and Personnel may make grants
to any body or persons (not being a body carried on for profit) having among its objects the conservation of wildlife or of the countryside.
That does not have to be the only objective of the body; it is only one of several. Organisations may have more


than one interest and they may not be universally loved, even if the Government are prepared to give them money. One wonders whether any grants, loans and financial help will be used in a way that might be detrimental to the desires and wishes of others who might have an interest in that same land.
The Government are giving a financial advantage, even if it is only an offsetting financial advantage. Heaven only knows when money goes into an organisation what the end result will be. I am always unhappy about such measures. I would prefer the Department to have taken direct responsibility for those matters rather than subsidise someone else to do it. It would be simpler and more straightforward for the individual directly responsible to be on the Government Bench so that we could question him. However, instead, the matter is dealt with at arm's length and hon. Members can be fobbed off. The Department of the Environment is the proper body to take direct responsibility for those lands.
There is the whole question of covenants and management agreements. As time is running out, I shall not go into that matter too deeply. I wish to draw to the attention of the fanning community in Northern Ireland that once such a covenant or management agreement is entered into, it is permanent. Therefore, there is a permanent loss to the landowner. It is doubtful whether the successors in title would in all cases be happy that an agreement had been made. I would not as a landowner wish to make any commitment which extended beyond my lifetime, as one has no way of knowing what the next generation will do or what the end result might be. The farming community will need to consider this matter deeply before entering into any commitment.
It will be possible under article 19, by byelaw, to prohibit
the shooting of birds or of birds of any description within such area surrounding or adjoining the nature reserve".
How will that work? What is meant by "area surrounding"? How wide will be the boundary of land which is not under the direct control of the body which controls the nature reserve? Will it be 100 yards, one mile, or what? Sportsmen will want to have that made clear.
There is the problem of seals in relation to marine reserves. The Under-Secretary will be aware of the problem with seals on the west coast of Scotland. While they may not pose a major problem off the coasts of Northern Ireland, they are of concern to salmon fishermen. These problems are well known to the Minister. I should not like the position to be reached when everybody loved the seals so much that they forgot about the fish and the fishing communities.

Mr. Chris Patten: indicated assent.

Mr. Ross: I am glad to see the Under-Secretary nodding in agreement.
In Scotland, the needs of fishermen are being ignored, and the right of seals to multiply for ever is being greatly respected. I hope that the Minister will give an assurance that easily understood regulations will be laid to enable everyone to understand what is an adequate number of seals—or of any species of wildlife in a reserve—so that numbers may be kept to reasonable levels.
As other hon. Members have said, the implementation of these provisions will depend on money being available. As this is partly an exercise in centralisation, I hope that the money will be forthcoming.
What demands are placed on us in this connection by the EEC and the Berne convention? Only in the Minister's closing remarks on the preceding order did it become plain that the real reason for introducing the ban on snares and automatic shotguns was the demand of the EEC. That, in my eyes, was enough to condemn the proposal straight away.

Mr. Chris Patten: I am grateful for this opportunity to respond to the debate.
The hon. Member for Middlesbrough (Mr. Bell), in an interesting speech, said that he thought that we were, by the order, improving on Great Britain legislation, and that was a fair point for him to make. He then said—this point was made by a number of hon. Members—that appreciation of the progress that we were making by the order had been somewhat undermined by the terms in which article 24 had been drafted.
There is not much point in my seeking to adduce once again the reasons for the choice of words in article 24. I must clearly take responsibility for what happens in my Department and for the terms in which its legislation is drafted. I have listened carefully to the views of hon. Members, especially to those of the right hon. Member for South Down (Mr. Powell), who made, I think, his inaugural address on behalf of the royal society for the protection of parliamentary draftsmen. He put the point rather better than I could have done.
I appreciate that suspicions have been aroused by the drafting of article 24. The hon. Members for Belfast, East (Mr. Robinson) and for Belfast, North (Mr. Walker) have voiced them with their customary civility. I assure the hon. Gentlemen that their suspicions are groundless. However, I should not want them to blight what has been an agreeable occasion, or what is important and valuable legislation.
In the circumstances, it is reasonable for me to go further than I went in my earlier remarks and to give the undertaking that when we bring forward legislation, as we shall be obliged to do in due course to implement the Balfour report, we shall amend the wording in the article so that it takes account of the arguments that have been advanced. I hope that that will be regarded as satisfactory by the House. The issue was taken up also by my hon. Friend the Member for Harborough. (Sir J. Farr) and by the hon. Member for Isle of Wight (Mr. Ross). I hope that my undertaking will reassure those who understandably, are anxious. In the meantime, I repeat that my Department regards it as an obligation to declare as ASSIs all areas which meet the criteria which we shall be drawing up.

Mr. William Ross: As the Minister knows, there appear frequently from the departments of the Northern Ireland Office various orders which contain mistakes. Subsequently we receive a small slip which tells us that there is a error and that a word should be substituted for the one printed in the order. Can that not be done in this instance?

Mr. Patten: No. As always, the hon. Gentleman has made a seductive proposition, but it is not one that will lure


us into his boudoir. I wish that life was that simple and straightforward. I have noted what hon. Members have said during the debate, and my response is given on behalf of the Government. The hon. Member for Belfast, East said that I might be taken away to higher things. I assure him that, like my hon. Friend the Under-Secretary of State for Health and Social Security, who preceded me at the Department of the Environment for Northern Ireland, there is no more important Department than that for which I am responsible.
The hon. Member for Middlesbrough referred to marine nature reserves. The provisions relating to them are the same as those in the Wildlife and Countryside Act. Surveys are being undertaken to determine the criteria for the reserves and to identify potential reserves. We are all too conscious of the problems which have been faced on this side of the water. Monitoring is taking place, and should similar problems arise in Northern Ireland we shall seek to remedy the position, especially in the light of future changes that are made in Great Britain legislation.
The hon. Member said that in order to implement this legislation fully we would need, as the Balfour report suggested, to provide resources of manpower and cash. I accept that point, which the report agrued strongly. It would be injudicious and dishonest of me to pretend that the sky is the limit in providing resources. Nevertheless, I appreciate the fact that we need to do more and that, even while my Department has other pressing priorities, we need to commit greater resources. I am bound to confess that I doubt that the increase in resources will match what people will press us to provide.
The hon. Member for Isle of Wight referred to the Balfour report. I shall ensure that he is sent a copy. We shall welcome representations from everyone. I doubt that we could stop any representations. We look forward to the representations that we shall receive about that extremely thoughtful document, which was highly commended by the hon. Member for Belfast, East. I welcome the broad thrust of the document's proposals. Legislation will be required to implement them.
The right hon. Member for South Down referred especially to the relationship between the functions of the Department of the Environment and those that will be discharged by local authorities. He had in mind particularly the functions referred to in article 22, which follow the position that has obtained in great Britain since 1949. Clearly, we shall need to proceed, wherever possible, by agreement. The Department of the Environment will continue to establish nature reserves of national standing. Nature reserves of local status can be established by district councils. We shall encourage district councils to use the grants that we provide to enhance and control public access to areas of outstanding natural beauty.
The right hon. Member for South Down mentioned the loss of amenity by misuse by visitors to Trassey valley. The district council in that area may have a range of service grant — aided by the Department of the Environment. Where the district council makes an access agreement with a landowner, such as in the case to which the right hon. Gentleman referred, it takes over responsiblity and public liability for that land. I shall look again at that case. I should like to think that we could be helpful, working with the district council or with the

Mournes advisory committee, because I share the right hon. Gentleman's regard for and love of that area, even though I do not yet share his knowledge of it.
The right hon. Member for South Down asked about total expenditure. It is difficult to be precise. The order contains five new powers under which financial aid may be given, first, to district councils to acquire land for nature reserve purposes; secondly, to landowners tinder management agreements in respect of ASSIs; thirdly, to the owner of an estate in an agricultural unit who can show that he has suffered a reduction in the value of his estate which is directly attributable to the declaration of an ASSI; fourthly, to the owner of any estate in land comprised in an ASSI who can show that he has incurred loss or damage or abortive expenditure as a consequence of an extension of the initial three-month period of restriction or negotiation; and, fifthly, to voluntary conservation bodies and individuals under article 29. We are setting aside funds for those items in the financial year 1985–86. At this stage it is a little difficult to be precise about figures. We shall not be able to define the financial requirements accurately until the order has been in operation for a year or two.
I repeat what I said earlier to the hon. Member for Middlesbrough, that I recognise that we will have to commit more resources out of our fairly hard-pressed budget if the provisions in this legislation are to have the effect that we should all like.
The hon. Member for Belfast, North asked about local marine nature reserves and the possible interference with the passage of shipping, including pleasure boats. I hope that that will not occur. The right of innocent passage, as the hon. Gentleman will be aware, is an international obligation under the 1958 convention on the territorial sea and the contiguous zone. The byelaws that we shall produce cannot override international obligations to which we are a party. I hope that it will be possible to proceed in these matters by co-operation.
The hon. Member for Londonderry, East (Mr. Ross) asked about article 7. The National Trust is mentioned because of its statutory base. As the hon. Gentleman will be aware, it is established under an Act of Parliament. He also asked about article 22. The principle of giving grants is to encourage more bodies and individuals to be actively involved in conservation. He mentioned marine nature reserves, and there will, of course, be full consultation to determine marine nature reserves. We have provided for public inquiries before they are specified. Therefore, I hope that the relevant points that he mentioned can be dealt with during those consultations and the process of inquiry.
I shall conclude with the last sentences of the report by Dr. Balfour, which has been mentioned so often this evening. In her last sentences she wrote that
the opportunities for change provided by the Access to the Countryside (Northern Ireland) Order 1983 and the two Draft Orders must be grasped and the chance to develop new relationships in the countryside seized with purpose and understanding. Such initiatives can benefit those who live and work in the Northern Ireland countryside and those who visit and enjoy it, but most important of all will be the contribution to the quality of life in the Province. To do this requires a will at political and departmental level to change, and a commitment to provide the resources to do the job.
My Department looks forward to meeting that challenge and to providing the commitment which I know will be available from those who work in my Department.
It is my task to ensure that there are enough of them and that they have the resources to do the job which to date they have done so competently.

Question put and agreed to.

Resolved,
That the draft Nature Conservation and Amenity Lands (Northern Ireland) Order 1984, which was laid before this House on 22nd November, be approved.

Home Improvement Grants

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]

Mr. Austin Mitchell: The subject for my Adjournment debate is simple. Selling home improvements has become a high-pressure business, with high pressure at the door, through advertising in magazines and all the other advertising techniques. People offer guarantees. On double glazing, the guarantee can be for five years; on damp proofing it can be for 10 to 15 years; and on house extensions it can be for 10 years.
Such guarantees are a big inducement. They are featured prominently in many advertisements. I have one for Wallguard damp protection products with a huge "Stop it" guarantee for 30 years which claims that Wallguard unconditionally guarantees the treatment carried out to eliminate rising damp for 30 years. That advertisement appeared in the Sunday Express colour magazine on 2 December, 1984, and that same week Wallguard went into liquidation. Thereby hangs my tale.
Not only are many of the guarantees vague; they suffer from limitations of cover. People are guaranteed in the sales talk that there will be no condensation if double glazing is installed, and when the guarantee arrives it does not cover condensation. People suffer from exclusions of liability for consequential losses. If the damp coursing does not work and the whole room has to be redecorated or replastered, often that is not covered by the guarantee. Some of the guarantees are unenforceable without the assistance of a good lawyer, and all of them are only as good as the company that offers them. They are meaningless with a bad company that does not live up to its obligations; they are all right in the case of a good company. But they are all useless if the company goes bust, because they give the holders no right and they give the holders no claim, and as creditors the holders have no status. The guarantees effectively die with the company. But the problems caused by inadequate workmanship or faulty goods linger on.
Therefore, the question is: how can we guarantee the guarantees? It is an important question to anybody who wants to improve his own house. This is a £3,000 million a year business. I suppose we all want to improve our houses. Indeed, one of the most striking features of the past 15 years has been the great surge of home improvement. At times it seemed that the hills were alive with the sound of hammers as home improvement went on. It makes life better, it makes life more comfortable, and it improves the housing stock of the country. It is, indeed, a national service. I should have thought, therefore, that a Government who proclaim their commitment to home ownership would want to safeguard that business and the guarantees that are an essential part of it.
The business is highly competitive and has brought in sharp operators—in some respects cowboys. Guarantees are needed against their inadequacies. Home improvements last for years; the householder is guaranteed that they will live up to the claims made for them. He needs guarantees to give him peace of mind. But what happens if the company goes bust?
There have been several examples in recent months. One of them was Monarch Home Extensions, Peterborough-based, which was offering 10-year


guarantees on its work. Another was Coldshield Windows, a big name in the business, which was offering five-year guarantees on its double glazing. There was Mulberry Home Extensions. There was Wallguard Damp Treatment, which I have already mentioned and which was offering a 30-year guarantee. The last three, Coldshield, Mulberry' and Wallguard, were taken over by the Hawley Group in September 1984. The intention then was said to be to combine Coldshield with Alpine, which the Hawley Group already controlled. but in fact all three companies were liquidated in December. A number of householders—it might be as high as 2,000—holding guarantees for work done by those companies were left with worthless guarantees. They had trusted the reputation of the company, they had taken the guarantee, and they were left with no redress or stake; they were not even told, in many cases, that the company which offered them the guarantee had gone into liquidation.
The Hawley Group was happy to take on those companies earlier in the year. It has a similar business, Alpine Double Glazing, so that it can absorb sales money and take on uncompleted business, but it does not feel any compulsion to take on the guarantees offered by the companies that it took over. The Hawley Group is a big group—its turnover in the first six months of 1984 was £119 million — but it has nothing to spare for the guarantees of people who had had work done by the companies that it took over last year. It has just taken over four United States companies concerned with cleaning and landscaping for a first payment of £4·4 million, but there is nothing to spare for the guarantees issued by Coldshield, among others.
The merger makes good business sense, but it does not make good business sense to take on the obligations of the companies that are taken over and then liquidated. For example, there were obligations to old couples with badly fitted double glazing and people with damp courses that were not working properly. That has happened not only with the companies that I have quoted but with a whole range of companies. I have a letter from Mr. Donald Livingston of Largs in Scotland, who says:
Having 25 years experience in the Aluminium Window Industry and a former member of The Aluminium Window Association I am disgusted with the present state of affairs in the Replacement Window Industry.
Mr. Livingston writes:
The main problem lies in the installation of replacement windows. Old windows are ripped out and new ones installed and with timber facings, beading etc., fitted internally, the customer cannot see if the job has been 'botched'. Poor external mastic painting eventually leads to water penetration.
Mr. Donald Livingston includes in his letter a cutting from the Sunday Post with a customer complaint to the newspaper. Mr. D. Jenkins writes:
Last April, we decided to have double glazing by Alva Glen Windows, Ltd. After the fitting in July, we've had leaking frames, seals incomplete, dust and debris in the sealed glass, etc. They came three times to rectify the faults, which are still there. I've heard they're in financial trouble.
The newspaper replies, somewhat tersely:
Afraid you're right, Mr. J. Firm in liquidation. Will send address which should be helpful.
I wonder whether it was. That is the sort of thing that is happening all too often and for which, if the firm goes out of business, the customer has no redress.
Therefore, the guarantee is not what it is supposed to be—something to give the customer peace of mind and confidence in the installation. It is not rare, because over

a score of companies, many small, have gone bust in the past few months, some this week. The problems they face are the recession, and the facts that the trade is overcrowded and has probably' peaked. and that VAT was imposed on home improvements in June. The situation will get worse now that interest rates have risen by 2·5 per cent. because that will be a bitter blow to a business that has become intensely, almost hysterically, competitive.
The extent of that competition is shown by the increasing hysteria of many of the advertisements, which say, "35 per cent. off', "One third off', "Save up to 40 per cent." Those cries reveal a business in a frenetic state of competition. A business that depends, as this one does, on credit, will be hard hit by a 2·5 per cent. increase in interest rates. Something needs to be done, and done soon if the industry is, as I have prophesied, facing severe problems.
I have some suggestions. My Adjournment motion refers to home improvement grants. I approached the matter in that way, frankly, because in an Adjournment debate one cannot propose legislation. I suggest that the firms carrying out home improvements that qualify for grants be required to offer enforceable bonded or insured guarantees that will live on if the firm goes out of business and that those guarantees should be satisfactory in terms of the Office of Fair Trading criteria set out in its documents. That is essential, as I know from bitter personal experience of trying to get redress against a firm the work of which was inadequate, which had been done in my own home, on a home improvement grant. The firm went into liquidation. The council obligingly offered that I could sue it to get redress but then told me that that would probably cost more than the cost of the work in the first place. That is the first avenue of approach.
The second approach is to ask the Newspaper Publishers Association to modify its code of conduct and ensure that the guarantees that feature so prominently in advertisements—for example, a guarantee of 30 years issued in the week that the company went into liquidation—are enforceable and will live on. It should ensure that the newspapers do not go in for the practice of accepting advertisements from firms known to be in difficulties, which offer long-term guarantees that they cannot fulfil.
Thirdly, we can legislate so that, if a firm takes over after a company has been liquidated, it also takes on the liability of that company's guarantees. In this way, if a firm which offers guarantees goes into liquidation, those guarantees can be enforceable subsequently and the people who hold the guarantees will have a claim against the company. We should legislate to ensure that the guarantees are valid, bonded or covered by insurance.
Fifthly, the trade associations have a role. A responsibility falls on the trade associations for the different sections of the home improvement industry. There should be an industry bonding scheme. In the instance of Coldshield, the Office of Fair Trading has already drawn up a code of conduct in the cowboy country of double glazing in conjunction with the Glass Glazing Federation, yet the only responsibility that the Glass and Glazing Federation had when Coldshield collapsed, leaving tens of thousands of customers with worthless guarantees, was to say that, when people had put down the money and not had the order fulfilled, the federation would get another firm to put it in, an effort which was not much use.
The inadequacy of that effort contrasts with the Guaranteed Treatments Protection Trust which was set up recently by the British Wood Preserving Association and the British Chemical Dampcourse Association Ltd. to stand in place of any member contractor who ceases trading leaving unexpired long-term guarantees so that the guarantee through that organisation becomes a secured promise. We should commend and encourage that kind of industry effort as an important way of dealing with the problem.
The aim of responsible and respectable trade associations should be proper bonding in a trade association registered with the Office of Fair Trading so that it is known that the bonding is acceptable and those bonds will live on. This could bring some order and sense into what is still cowboy country and ensure that firms behave responsibly and are prepared to offer guarantees which can be enforced and which they can live up to. That is essential in an industry where conditions are becoming increasingly tougher.
In many respects, the tale of house improvements guarantees is a sorry one. I do not say that everybody with a guarantee should immediately reach for the panic button. Some progressive firms offer effective guarantees, and most guarantees are reliable as long as the firm survives and can be prodded by publicity, legal action or some other kind of pressure into honouring the guarantees. The problem is that not all firms are like that and that few guarantees are bonded or insured. Several firms have got into difficulties and other firms may well be threatened in the near future in the present tough conditions that industries are experiencing — a situation that has been made tougher by the Government's action on interest rates.
It is no use saying: let the buyer beware. I agree with the Office of Fair Trading that it is necessary to educate the consumer to know what rights he has under the guarantee. The consumer must be protected. That entails using the leverage of improvements grants to impose conditions, prodding the trade associations into effective action and enacting legislation to give rights to the guarantee holder. Providing a guarantee is a direct contract between the customer and an authorised insurer. Alternatively, it should be properly bonded in the industry.
There should be a concerted effort to ensure that guarantees mean something instead of being merely a means of conning the consumer into making long-term purchases, which all these items are. Guarantees should be a discipline on an industry which certainly needs one. It is in the interests of the reputable firms in the industry to control the cowboys and to make sure that all firms live up to standards and compete on the basis of satisfaction to the customers.
Home ownership is important and should be encouraged. Home improvement must also be stimulated. To do that the Government have a responsibility to act on the guarantees offered in the industry.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alex Fletcher): I am grateful to the hon. Member for Great Grimsby (Mr. Mitchell) for raising and drawing attention to this subject. There cannot be any hon. Member who over the years has not heard

complaints from constituents who have had a great deal of their savings or time and effort wasted by cowboy builders or so-called guarantees or commitments which were not followed through when things went wrong with the business. I am sympathetic, to say the least, and anxious to see what solutions can be found.
The industry is extremely diverse, ranging from the one-man business, and indeed the moonlighter, to very substantial firms, and it is not easily organised into a system of trade associations which could achieve the kind of self-regulation that one would like. I emphasise selfregulation and shall return to it in more detail later.
As the hon. Gentleman knows, the industry generally and the home improvements sector have been studied by the Director General of Fair Trading. In June 1983 the Director General produced a major report on the subject with a large number of recommendations, including cooling-off periods, written contracts, a general duty to trade fairly, encouragement of warranty schemes and standard contract terms. I assure the hon. Gentleman that the recommendations are being very seriously considered by my colleagues at the Department of the Environment. Indeed, I believe that the matter was debated in the House about a year ago.
In a home improvement transaction, as in any other, the primary responsibility must rest with the purchaser—the home owner—to satisfy himself that he is getting the best possible job done. The Office of Fair Trading has provided very useful guidance on this, including an invaluable checklist of seven golden rules for home improvements.
It is always worth choosing a reputable builder and taking full advantage of the schemes increasingly being offered by the construction industry to improve its services. One must, of course. look behind the schemes. I hope that the publicity provided by this debate and the hon. Gentleman's interest in these matters will be further warning to consumers not to take advertisements, such as the one to which he referred, at their face value. I do not know whether it would be practicable for newspaper publishers to try to impose some discipline among themselves to look into such schemes, but the hon. Gentleman's suggestion is certainly worth following up with the Director General, with whom I believe the hon. Gentleman is in correspondence.
The hon. Gentleman particularly mentioned dampproofing. I believe that he mentioned the joint guarantee scheme offered by the British Chemical Dampcourse Association Ltd. and the British Wood Preserving Association, under which member firms offer an independent insurance scheme to clients on payment of a small premium, providing a 20-year back-up guarantee intended to cover situations in which individual contractors go out of business. That appears to be an ideal type of scheme, in that it is independently covered by the insurers and will take effect in cases of insolvency.
I was very pleased, just recently, to learn of the launch of the new guarantee scheme of the Building Employers Confederation by my hon. Friend the Parliamentary Under- Secretary of State for the Environment. As he said on that occasion, the irresponsible section of the industry has fed Esther Rantzen with a rich and steady diet—which, alas, means that much of the industry is tarred withthe same brush.
My hon. Friend also pointed out then that repair, maintenance and improvement is becoming an increasingly important part of the construction industry work


load. Ten years ago repair and maintenance made up only 28 per cent. of all construction work: last year, it had increased to about 40 per cent. The business is expanding.
It is normal in such circumstances for people to look to the Government to provide some form of statutory regulation or licensing for firms in the industry. I do not believe that that would be the right answer. I doubt the practicability of such a scheme. I cannot think of an industry that would be more difficult to organise in such a way than the building industry. That is why selfregulation seems to me to be the only way forward.
That view is shared by the Director General of Fair Trading, who has actively pursued a policy of developing codes of practice for many sectors of industry. He has, for example, helped in the formation of a code of practice by the Glass and Glazing Federation which covers, amongst other things, double glazing, to which the hon. Gentleman referred.
There are other schemes. The Building Employers Confederation guarantee scheme was a major step forward in changing the image of the industry and helping to restore confidence to those who have suffered in the past. There are also schemes operated by the Federation of Master Builders, the plumbers and the roofing contractors. The schemes offer varying degrees of guarantee.
Looking to a wider front, I know that the hon. Member is generally concerned about the situation of guarantees and what happens when companies go out of business; and I know he is concerned about other companies assuming responsibility for guarantees and for passing on information to guarantee-holders.
The Government's proposals for the reform of the insolvency legislation—a major Bill received its Second reading in another place on Tuesday—will provide an additional degree of protection for consumers, especially through the wrongful trading provisions, which are aimed at directors of businesses who, knowing that they have become insolvent, continue to undertake obligations that they cannot meet.

Mr. Austin Mitchell: Would it not be possible to table amendments to the Bill giving rights to guarantee-holders? They have a financial stake in the company that goes out of business, so their rights should be recognised in any insolvency proceedings.

Mr. Fletcher: Yes; but the liability would be a contingent liability. It would not be a liability that an official receiver or liquidator could take into account. That would be the difficulty. Only if the guarantee-holder had to call in another contractor to do the work, or incurred some other expense, might he rank as a creditor.
I do not, therefore, think that the hon. Gentleman's suggestion is a practical one. We can, however, make directors act more responsibly, and minimise loss and damage, through provisions such as the wrongful trading provisions. Where they wilfully took on obligations that they knew that they could not honour, directors would effectively lose the protection of limited liability. The hon. Gentleman must agree that that is a step in the right direction.
The problems that have been identified, particularly in the Director General's home improvements report, can best be overcome by voluntary controls on the part of the industry and by greater care on the part of members of the public as these problems are increasingly brought to their attention and they become much more suspicious of guarantees.
As the hon. Gentleman will know, many people—including myself—have bought television sets and paid the extra £25 for a five-year guarantee, only to find that they have become responsible for insurance, having contracted with perhaps an authorised company that is not authorised in that line of insurance. I should add that that was before I took on my present responsibilities. That might be more luck than good thinking, but I had better put it on the record.
The hon. Gentleman will know from the letter that he has received from the Director General of Fair Trading that consumer guarantees are the subject of a discussion paper which was published in August last year. It makes preliminary recommendations that guarantees should be clear and comprehensive, have standard terminology, that, as will almost invariably be the case with construction guarantees, they are for more than one year and that they should take the form of a direct contract of insurance between the purchaser and an authorised insurer so that, in the event of the contractor's insolvency, the consumer will be protected. The consumer will be a party to the insurance contract. I am sure that is a desirable objective.
There are bound to be difficulties for some companies in obtaining insurance cover. That gives the consumer the opportunity to test the company with which he is proposing to do business. There is nothing wrong with that. The trade associations might have some supporting authority or insurance companies might make it clear that a scheme is approved. That could provide real protection. I should encourage the industry to consider such schemes as the Director General is developing.
It is argued that home improvement grants should be linked to long-term guarantees. However, only about 10 per cent. of home improvement and repair work involves home improvement grants. Of some £8 billion-worth of work carried out last year in repairs, maintenance and improvements, only £900 million was given in grant. Therefore, linking the grant with consumer protection would leave the vast bulk of home improvement work unaffected. I understand the hon. Gentleman's reasons for advancing that argument, but that approach would not tackle the scale of the problem.
During the past year, the Government have been carrying out a thorough review of private sector housing improvement policies, including the home improvement grant system. We hope to publish our proposals shortly in the form of a consultation document. The question of guarantee or warranty schemes, and their application to home improvement work, will be covered.
The aim is, in due course, to introduce legislation to simplify the present grant system and to ensure that the money which is available for grants is spent where it is most needed and does good. We have considered measures to ensure that work financed with the aid of a grant is carried out by reliable contractors to a good standard. The hon. Gentleman will tell me to get into that and define a reliable contractor. He is one who is properly and adequately insured—

The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour. Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at thirteen minutes past Three o'clock.